The Comprehensive Risk Control Package: Its effect on performance during the COVID- 19 pandemic

Abstract

This study analyzes the impact that IFRS 16 has had on the accuracy of equity analysts’ forecasts in Scandinavia, with a particular focus on potential sector variations. The primary objectives of this research are (1) to examine whether the mandatory implementation of IFRS 16 led to decreased accuracy in equity analysts’ forecasts, and (2) to assess whether changes in accuracy vary by sector. We employed multivariate regressions to test for statistical significance in changes in forecast accuracy measured by the Median Absolute Forecast Error (MAPE). Additionally, a survey was conducted involving equity analysts from a variety of investment banks in Oslo to supplement the quantitative data. We found no statistical evidence to support the hypothesis that the implementation of IFRS 16 led to an increase in forecast errors. This suggests that either the forecast accuracy did not change significantly postimplementation or that the time frame since implementation has been insufficient to observe its full effects. While the immediate impact of IFRS 16 on forecast accuracy was not evident, this study serves as a foundation for further research on the topic