Accounting Seminar: Dr Mario Schabus
The Relation between Internal Forecasting, Misreporting, and the Importance of Meeting Performance Benchmarks
We examine the relation between the importance for firms to meet external performance benchmarks and the role of internal forecasting and misreporting for increasing the likelihood of meeting benchmarks. Drawing on survey data from investment center managers, we hypothesize and find that the importance of meeting benchmarks is positively associated with the sophistication of firms’ internal forecasting, and misreporting. We next examine the relation between internal forecasting and misreporting. We find that a one standard deviation increase in the sophistication of internal forecasting is associated with a 31% decrease in misreporting. The results suggest that firms with more sophisticated internal forecasting engage in less end-of-year misreporting. We contribute to the literature by studying attributes of firms’ internal forecasting as part of firms’ internal information environment. The paper specially speaks to the planning and coordination role of budgeting and forecasting, as opposed to the relatively more extensively studied evaluation and incentive role.
Mario joined the University of Melbourne in September 2017 as Senior Lecturer, and teaches Management Accounting on a Masters level. He received his doctoral degree from the University of Amsterdam (The Netherlands) in 2017, and visited the University of Michigan from fall 2015 to spring 2017. He obtained a MSc in Accountancy and Control at the University of Amsterdam in 2012 and a BSc in Business Administration at the University of Graz (Austria) in 2011. Mario's interests span several research streams at the intersection between financial and managerial accounting. For example, in his job market paper he investigates how board networks can facilitate firm planning and forecasting, which mirrors his interest in managerial decision making, as well as corporate governance. In two other recent projects, he and his co-authors examine questions of organizational architecture (i.e., budgeting, incentive contracting, and performance measurement), with specific focus on the role of CFOs, financial directors and controllers. Mario usually examines research questions using archival data and non-publicy available field data. He published in The Accounting Review and serves as ad-hoc reviewer for The Accounting Review and the Contemporary Accounting Review.