Wharton professors recognized for research on risk-based forecasting

CGMA-sponsored management accounting award given at AAA Management Accounting Section’s Midyear meeting.

FORT LAUDERDALE — The Association of International Certified Professional Accountants (the Association) and the Management Accounting Section of the American Accounting Association (AAA), on Friday recognized two professors for their research on the benefits of risk-based forecasting.

Christopher D. Ittner and Jeremy Michels of The Wharton School, University of Pennsylvania, were named recipients of the 2019 Greatest Potential Impact on Management Accounting Practice Award.

The honor recognizes academic research considered to most likely have a significant impact on management accounting. It is sponsored by the Association, the global accounting organization formed by members of the American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA). The award is given on behalf of the Association’s Chartered Global Management Accountant (CGMA) designation, which distinguishes a unique group of 150,000 management accountants worldwide who have reached the highest benchmark of quality and competency.

The professors’ paper, “Risk-based forecasting and planning and management earnings forecasts,” explores the link between the quality of information used for managerial decision-making and external reporting quality.  The research examines survey data and management earnings forecasts from a sample of publicly traded U.S. companies to prove that more sophisticated risk-based forecasting and planning processes are associated with smaller earnings forecast errors and narrower forecast widths.

Ann Gabriel, associate professor of accountancy at Ohio University, presented the award, which includes a $2,000 stipend, at the 2019 AAA Management Accounting Section’s Midyear meeting in Fort Lauderdale, FL.

“The research by these professors highlights the importance of an integrated approach to risk management,” said Gabriel.  “It also underscores the important role management accountants play in helping organizations integrate risk management practices and improve their ability to forecast financial outcomes.”