Forecasting in Austrian companies: Do small and large Austrian companies differ in their forecasting processes?

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4 Citations (Scopus)

Abstract

Purpose - The purpose of this paper is a comparison of forecasting behaviour of small and large Austrian firms, analysing their forecast practices in a volatile business environment. Design/methodology/approach - The empirical analysis of the paper, deductive by nature, was conducted by means of a quantitative online-survey (199 data sets). The relationship of perceived volatility and forecast predictability was evaluated by correlation analysis.T-Test and analysis of variances were used to examine significant differences in the forecast characteristics between small and large Austrian companies and different industries. Findings - The study provides evidence that the surveyed companies have been hit by volatility, showing that Austrian SMEs are significantly more severely affected than large companies. The increasing volatility correlates with a reduced forecast predictability of sales quantities and commodity prices. Large Austrian companies primarily use a broad spectrum of qualitative forecasting methods. In contrast, Austrian SMEs utilize simple quantitative and qualitative forecast techniques, like the forward projection of historical data. Research limitations/implications - Relevant for the forecasting of small and large companies. Practical implications - Although management requests a broad spectrum of forecast qualities, the current usage of less sophisticated methods reveals a gap between intention and reality. Companies that supplement their qualitative techniques by sophisticated quantitative ones should expect less forecast bias. Originality/value - This paper initially compares forecast methods in large and small Austrian firms and additionally provides the impact of volatility on the forecast predictability.

Original languageEnglish
Pages (from-to)359-382
Number of pages24
JournalJournal of Applied Accounting Research
Volume16
Issue number3
DOIs
Publication statusPublished - 9 Nov 2015

Keywords

  • Finance
  • International accounting
  • Management accounting
  • Risk management

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