Stochastic Risk Analysis Of Budgeted Financial Statements

A Managerial Accounting Case Utilizing Optimization And Simulation

“…Simulation is widely used in accounting practice for capital investment analysis and financial forecasting and budgeting to facilitate decision-making (O' Leary, 1983;Togo, 2007). It is also used in accounting education to introduce uncertainty modeling, risk analysis, and the unique accounting needs of smaller businesses such as make or buy decisions, production planning and control, and strategic analysis (Schiff and Smith, 2008).…”

Stochastic income statement planning as a basis for risk assessment in the context of emissions trading

“…Typical decision variables are net profit, cash flow or net present value (see e.g. Togo, 2004Togo, , 2007Kalantzopoulos et al, 2008). However, the derivation of these distributions is a challenge for management as each depends on a number of interdependent input variables.…”