PracticeAuditKMPG study reveals 8 in 10 make forecast errors

KMPG study reveals 8 in 10 make forecast errors

A KPMG advisor is ‘surprised’ at the scale of inaccurate financial estimates where eight in 10 admit to forecasting errors

Over the past three years, almost eight out of 10 companies admit to
forecasting errors which are more than 5% too high or too low, a global survey
conducted by big four firm
KPMG reveals.

Simon Osmer, a KPMG partner in advisory practice, told the
Financial
Times
he had been ‘surprised’ at the scale of the problem, especially given
that accurate forecasting provided ‘reliable foundations’ on which ‘heavyweight
strategic decisions’ were based.

Osmer said such errors led to weak business performance because the
consequences of poor forecasting go beyond damaging the share price.

The study showed companies which kept inaccuracies below 5% enjoyed an
average share prices rise by 46% over a three-year period, according to the
survey.

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