Describe the different risks and incentives that managers accountants and analysts face.
Discussion (Chapter 10 in the textbook / or see the ppt):
For each of the steps in the “Seven Step Forecasting Game Plan” for forecasting, discuss the following:
Who do you suspect is being included in creating each step of the various company forecasts?
Why? Why not? Be specific about the various players and the reasons they might be involved.
Assignment (Chapter 10) (1-2 pages double space):
Objective and Realistic Forecasts. The chapter encourages analysts to develop forecasts that are realistic, objective, and unbiased. Some firms’ managers tend to be optimistic. Some accounting principles tend to be conservative. Describe the different risks and incentives that managers, accountants, and analysts face. Explain how these different risks and incentives lead managers, accountants, and analysts to different biases when predicting uncertain outcomes.