Introduction Background of the Study - Free Essay Example

Sample details Pages: 13 Words: 3837 Downloads: 7 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Good corporate governance is the key for the business organization success. Corporate governance explained the rules of governing: board structure, managersà ¢Ã¢â€š ¬Ã¢â€ž ¢ and boardsà ¢Ã¢â€š ¬Ã¢â€ž ¢ incentive compensation, decision right by the board and the CEO, succession of the board and CEO, shareholder voting, debt/equity finance, disclosure concerning takeover and etc. Thus, the corporate governance can be defined as a set how the institutional arrange and effect the corporate decision making (Ball, 1998). Don’t waste time! Our writers will create an original "Introduction Background of the Study" essay for you Create order Due to the poor corporate governance, the Asian 1997/98 crisis has affected many companies including the Government Link Companies (GLC) around the region because of the poor corporate governance practices which reflected the corporate decision making. Previous researchers have found poor corporate governance consists of over-leveraging (Fraser, D.R, C.Derasid, 2006); lacks of accountability, transparency and financial disclosure (Mitton, 2002) have influences to the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s failure. Furthermore, in the United States, many latest financial reporting scandals have been caused by the poor corporate governance which has oversight during the financial reporting process (Agrawal Chadha, 2005). Most of the corporate governance failures cases recorded in Malaysia are related to billing scheme fraud, financial statement fraud, employeesà ¢Ã¢â€š ¬Ã¢â€ž ¢ fraud and misappropriation of assets (Haron, 2006). Economic crime actual statistic 2007 showed Asset misappropriation (36%), Corruption and bribery (24%), Accounting Fraud (15%), Money Laundering (5%), IP infringement (9%) and others (7%) cases ( PwC Alert Issue No.72, 2007). Thus, based on the PwC Alert statistic explained that the poor corporate governance caused for the economic crime. This statistical information has motivates this study to examine further the impact on the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast which influence by the corporate governance. 2.0 Problem Statement Accuracy of the analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast depends on many factors that derive to achieve the accuracy of earning. Analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ are the information available in the capital market that links the financial and non-financial information to estimate the earnings (Schipper, 1991). The accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast also linkages to the corporate governance. Previous study shows better corporate governance tends to issue more specific accuracy of the analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast (Ajinkya, Bhoraj, Sengupta, 2005). Byard and Weintrop (2006) find better corporate governance firm contribute to better analyst forecast. The prior studies show the relationship between the corporate governance has influence the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. There are underlying theories such as agency cost where describe the problem between the principal and agent which the accounting asymmetric information exits between the parties. In this study , the researchers believe corporate governance is to reduce information asymmetric. This study chooses the agency theory because ownership structure is use as one of the control variable where the researcher believes the selected companies will have separation between ownership and management which will cause to agency problem. Previous study find managers have more on long term interest rather than the interest of shareholder (Winter, 1999). The problem arises between the manager and shareholder affected the positive role of corporate governance practised in the company. Furthermore, the revised of Malaysian Code of Corporate Governance (MCCG) in October 2007 has enhanced the corporate governance practised in the several aspects. The changes in MCCG have motivated this study to find the influence of MCCG before the revised and after the revised toward the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast in public listed companies. This study will examine the factors of corporate governance that influence the dispersion and error of accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. Thus, the problem statement for this study is to examine the dispersion and error of accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast influence by the corporate governance structure. 2.1 Research Questions 1. What is the effect of corporate governance to the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast? 2. How the corporate governance factors influence the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast? 3. What are the effects of MCCG revised toward the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast? 2.2 Research Objectives Corporate governance reduces the accounting information asymmetric between a company and investors. 2. Board of director efficient role in corporate governance influence the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. 3. The revised MCCG do enhance the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. 3.0 Significance of the Study. The accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast is an important key to enhance the investors confident. The confident levels of investors are depending on the market demand of an organisation which measure by using the available informationà ¢Ã¢â€š ¬Ã¢â€ž ¢s in the public to forecast the company performance. This study will use corporate governance variables such as the à ¢Ã¢â€š ¬Ã…“CEO Duality Structure, the independent of the Board, The size of the Board and The Governance Role of Audit Committees. Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast will act as a proxy for the quality of the firmsà ¢Ã¢â€š ¬Ã¢â€ž ¢ efficiency and effectiveness to achieve the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. Furthermore, to relate between the analystà ¢Ã¢â€š ¬Ã‹Å"s forecast accuracy and firmsà ¢Ã¢â€š ¬Ã¢â€ž ¢ governance, this study includes two set of control variable such as firmsà ¢Ã¢â€š ¬Ã¢â€ž ¢ ownership structure and forecast horizon that affects the analystsà ¢Ã¢â€š ¬Ã¢ „ ¢ forecast accuracy (Byard, Li, Wintrop, 2006). Previous study finds that poor corporate governance tends to reduce the confident level of investors (Noordin, 1999). Prior researchers find poor corporate governance leads to mistake in reporting the financial progress (Agrawal Chadha, 2005). Based in many empirical studies, this study will contribute to enhance the investor confident level and identifies which corporate governance variables are contributes and influence to achieve the accuracy of forecast analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢. Furthermore, the revised in Malaysian Code of Corporate Governance in 2007 will impact to the company existing corporate governance. Thus, this study will examine the effect of prior and after effects on corporate governance to the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. 4.0 Literature Review Corporate governance can be defined as a set on how the institutional arrangement can affect the corporate decision making (Ball, 1998). Corporate governance describes the rules of governing: board structure, managersà ¢Ã¢â€š ¬Ã¢â€ž ¢ and boardsà ¢Ã¢â€š ¬Ã¢â€ž ¢ incentive compensation, right decision made by the board and the CEO, succession of the board and CEO, shareholder voting, debt/equity finance, disclosure concerning takeover and etc (Verhoven, 1998). While another researcher define corporate governance as whole control systems where a company is directed and controlled with the basic focus toward the role of à ¢Ã¢â€š ¬Ã…“governorsà ¢Ã¢â€š ¬? of the company which is the board of directors (Haron, 2006). The corporate governance will determine how well the organization performance and contribute for good decision making when confronted with the uncertainty issues. The current uncertainty economics condition has weakened many companies around the world because of poor corporate governance. The 1997/98 Asian financial crisis has revealed that lack of corporate governance practices in Malaysia has contributed to the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s failure during the crisis (Wahab, C.Y.How, Verhoeven, 2007). Poor corporate governance leads to mistake in reporting the financial progress (Agrawal Chadha, 2005). Poor corporate governance that identify by previous researchers are such as over-leveraging (Fraser, D.R, C.Derasid, 2006); lack of accountability, transparency and financial disclosure (Mitton, 2002) has influence to the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s failure. Other researchers find during the crisis, variables under the corporate governance are the most explained proportion of the excha nge rate variation, performance of stock market and the other economic variables (Johnson, Boone, Breach, Friedman, 2000). Based on the previous studies, this study is interested to explore about the corporate governance effects on the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast in public listed companies in Bursa Malaysia. The previous researchers find better corporate governance firm contribute to better accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast ( (Byard, Li, Weintrop, 2006). Factors that influencing the good corporate governance are: (i) quality board of directors, (ii) quality audit committee, (iii) effective internal audit function, (iv) quality internal control system in place and (v) independent external auditors (Haron, 2006). In this study, the researcher will examine the corporate governance variables such as the à ¢Ã¢â€š ¬Ã…“CEO Duality Structure, the independent of the Board, The size of the Board and The Independent Director of Audit Committees. Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast will act as a proxy for quality of the firmsà ¢Ã¢â€š ¬Ã¢â€ž ¢ efficiency and effectiv eness to achieve the accuracy of the analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. Furthermore, to relate between the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast and firmsà ¢Ã¢â€š ¬Ã¢â€ž ¢ corporate governance, this study includes two set of control variable such as firmsà ¢Ã¢â€š ¬Ã¢â€ž ¢ ownership structure and forecast horizon that affects the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast (Byard, Li, Wintrop, 2006). 4.1 Corporate Governance 4.1.1 The à ¢Ã¢â€š ¬Ã…“CEO Dualityà ¢Ã¢â€š ¬? structure à ¢Ã¢â€š ¬Ã…“CEO Dualityà ¢Ã¢â€š ¬? exists when an organization has the person hold the CEO position and at the same time is a chairman of Board of Director in the company. The duality or multiple positions such as chairman and board of director are common practiced among the listed firm in Malaysia (Haron, 2006). Previous researchers find company CEOà ¢Ã¢â€š ¬Ã¢â€ž ¢s that acting dual role do have lesser shareholder return (Rechner D.R.Dalton, 1989). However, other researchers find the duality role of a CEO can lead to positive relationship to performance under certain industry condition such as resource scarcity or high complexity and the effect on other economic conditions is negative (Donaldson, 1991). This mean the duality role has negative relationship with the return except under the condition of resources scarcity or high complexity. Another study also finds the presence of CEO Duality in organization has significantly negative relationship with the accuracy of analysts à ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast (Byrad, Li, Weintrop, 2006). 4.1.2 The Independent Board of Directors Independent Board of Director who is does not hold any executive position in the organization. The independent directors are responsible to make independent judgments in strategy, performance, resources, key appointment and etc. Thus, the independent board of directors must free from any relationship with the management that will bias during the judgment exercise. Previous study shows, majority number of independent board of director during the tenders offered to biddersà ¢Ã¢â€š ¬Ã¢â€ž ¢ results zero stock price return (Byrd Hickman., 1992). While the bidders without the independent board suffer statistically loses on 1.8 percent on average (Leng Chang, 2004). Previous study also find the relationship between the proportion of à ¢Ã¢â€š ¬Ã…“inside directorsà ¢Ã¢â€š ¬? and bidder stock price return is significantly negative (You, R. Caves, Henry, 1986). The finding shows that organization that have more independent directors tend to be more profitable compare to the organizatio n that has lesser independent directors. Furthermore, the additional of outside directors has pushed the stock price increase on average by 0.2 percent (Rosenstein Wyatt, 1990). The independent board of director has significantly positive relationship with the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast (Byrad, Li, Weintrop, 2006) 4.1.3 Board of Director Size. Board director size is referring to the total number of director exist in the organization. Previous researcher used the agency theory and assumed that larger board will consists of various education background, industrial background, and also skills (Haron, 2006). The quality of an organization to monitor and decision making are depending on the board of directorsà ¢Ã¢â€š ¬Ã¢â€ž ¢ size which will determine the organization performance. Thus, what size whether large or small board of directors? The previous study find the board of directorsà ¢Ã¢â€š ¬Ã¢â€ž ¢ size should be small because small size will lead the board function effectively (Smale, Patricoft, D.Marcus, D.W.Johnson, 1995). However, the size of the organization also determines the size of the boards: larger the company has larger the number of boards. The consequences of larger board of directors are reduce the ability of board to control CEO (Lipton J.Lorsh, 1992) and slower the decision making (Kole K.Lehn, 1997). P rior studies also do not specified recommended the number of directors but the companies should allow the active boards which have ability to make effective decision and performing their function. 4.1.4 The Independent Director of Audit Committees Audit committee is a committee formally appointed by full board and responsible to consider and report on matters comprised of financial reporting and governance procedures and the organization audit and other matters which referred by the board (Kulansingam, 2002). Several study find presence of an audit committee is associated with lesser incidences of error in financial reporting. For example, previous researcher find organization that has audit committee would likely more reliable financial reporting such as absence of material errors, irregularities and illegal act (Kulansingam, 2002). Klein ( 2002) finds negative relationship between the audit committee and management earning. However, previous study found that more independent audit committee does not improve the quality of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast accuracy (Byrad, Li, Weintrop, 2006). 4.2 Control Variables 4.2.1 Ownership Structure Ownership structure is also known as Board of director ownership where it works as direct incentives to the manager who has the favour to act like the shareholdersà ¢Ã¢â€š ¬Ã¢â€ž ¢ interest. (Weishbach, 1988). The ownership structure is one of the major corporate governance mechanisms that help to monitor the agency problem (Jensen Meckling, 1976). Control the agency problem in organization able to enhance the firmsà ¢Ã¢â€š ¬Ã¢â€ž ¢ wealth (McConnell Servaes, 1990). Another researcher find that reduce of agency problem is link to the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast (Hope, 2003). Thus, ownership structures where the top manager holds the more percentage of stocks are likely to make decision to maximizing the shareholdersà ¢Ã¢â€š ¬Ã¢â€ž ¢ wealth. 4.2.2 Forecast Horizon Based on the previous studies, firm characteristic was included as a control variable to determinant of the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. Forecast horizon is an important element to obtain the accuracy outcome of information. The different duration of forecast period can result different result and assumption. For example, previous study that the shorten forecast horizon tend to result less biased and less extreme (Capstaff, Paudyal, Rees, 1995). This mean the longer the forecast horizon is more exposure to more biased and more extreme. The shorten and longer horizon are depending on the analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ reputation which the longer horizon required more information compare to shorten horizon forecast because the more longer the analysts mean more information available which will affect the analysts credibility. 4.3 Accuracy of Analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ Forecast 4.3.1 Dispersion Dispersion occurred when the disagreement among the analyst with the regard to expected Earnings per share (EPS) of a given form (Athanassakos Kalimipalli, 2003). Previous study finds that accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast has negative relationship with dispersion (Imhoff G. J. Lobo, 1992). To overcome this problem, previous researcher finds that availability of information will enhance the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast and reduce the degree of dispersion (Kwon, 2002). Hence, this study will use dispersion result to determine the accuracy earning which influence by corporate governance factors. 4.3.2 Error Forecast error is the difference between the actual or real and the predicted or forecast value of a time series or any other phenomenon of interest. Abarbanell and Bernard (1992) find that errors are positively related to the prior earnings change. The available information is important to obtained forecast accuracy. Ball and Brawn (1968) find that accounting information is use to predict the earning price. Kim and Verrecchia (1991) find the positive relationship between share-price response and the accuracy of management forecasts. While another study find negative relationship between the share-price and management forecasts errors (Laurent, 2000). Based on previous studies, this study will use corporate governance factors to influence the forecast error and determining the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. 5.0 Conceptual Framework Hypotheses Development. Independent Variable Dependent Variable ACCURACY OF ANALYSTSà ¢Ã¢â€š ¬Ã¢â€ž ¢ FORECAST CORPORATE GOVERNANCE The independent of the Board 1. Dispersion The size of the Board 2. Error The CEO Duality Structure The Independent of Audit Committee Ownership Structure ii. Forecast Horizon Control Variables Four hypotheses are develops in this study: H1 relates to the link between the independent of Board and accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. H2 relates to the link between the size of Board and accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. H3 relates to the link between the à ¢Ã¢â€š ¬Ã…“CEO Dualityà ¢Ã¢â€š ¬? structure and accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. H4 relates to link between the independent of Audit Committee and accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. 5.1 The independent of Board and Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. Independent Board of Director who is does not hold any executive position in the organization. Core, Holthausen Larker (1999) specify that fewer independent of Board of director cause to poor monitoring. The independent board of director has significantly positive relationship with the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast (Byrad, Li, Weintrop, 2006). H1: Higher number of independent of board is associated with higher accuracy of analysts forecast. 5.2 Size of Board and Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. Board director size is referring to the total number of director exist in the organization. Previous researcher used the agency theory and assumed that larger board will consists of various education background, industrial background, and also skills (Haron, 2006). Based on Yermack (1996) larger board reduce the board effectiveness. The previous study find the board of directorsà ¢Ã¢â€š ¬Ã¢â€ž ¢ size should be small because small size will lead the board function effectively (Smale, Patricoft, D.Marcus, D.W.Johnson, 1995). H2: Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast has negatively associated with the Size of board. 5.3 The à ¢Ã¢â€š ¬Ã…“CEO Dualityà ¢Ã¢â€š ¬? Structure and Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. à ¢Ã¢â€š ¬Ã…“CEO Dualityà ¢Ã¢â€š ¬? exists when an organization has the person hold the CEO position and at the same time is a chairman of Board of Director in the company. The duality or multiple positions such as chairman and board of director are common practiced among the listed firm in Malaysia (Haron, 2006). Prior studies argue find that present of CEO Duality in an organization is reflecting to poor governance (Jensen, 1993; Yermack, 1996). Previous researchers find company CEOà ¢Ã¢â€š ¬Ã¢â€ž ¢s that acting dual role do have lesser shareholder return (Rechner D.R.Dalton, 1989) H3: Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast has negatively associated to CEO Duality. 5.4 Independent of Audit Committee and Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast Audit committee is a committee formally appointed by full board and responsible to consider and report on matters comprised of financial reporting and governance procedures and the organization audit and other matters which referred by the board (Kulansingam, 2002). Several study find presence of an audit committee is associated with lesser incidences of error in financial reporting. Klein (2002b) finds that less independent of audit committee cause decreases in earning management. H4: Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast has positively associated with Independent of Audit Committee. 6. Research Methodology 6.1 Sample Selection To pursue this study, firstly the researcher has to select 100 companies which are listed in Bursa Malaysia. The selection of companies is base on random sampling. The researcher will use fully the secondary data in this study. The information sources will basically from the Company Annual Report and Institutional Broker Estimate System (IBES) consist of year 2006, 2007, 2008 and 2009. This study uses information from year 2006, 2007, 2008 and 2009 because the MCCG start revised on 2007. So, this study will examine the effect of corporate governance before revised and after revised. The Annual Report of the selected companies can be obtained from the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s website from internet. IBES provides data to calculate analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast accuracy which can be obtained from DataStream System and the system is available in Management School, University Sains Malaysia. Based on the information, this study will compare the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast between year 2006 to 2007, 2006 to 2008 and 2006 to 2009. This study will use 2006 as the final year of before revised and compare it with the 2007, 2008 and 2009 which are after revised. The implementation of revised corporate governance is mandated to all public listed companies. Thus, this study will examine the effect of the corporate governance before the revised on 2006 and the revised on 2007 until 2009 to the Malaysian Public Listed Companies. Furthermore, this study will examine the different between the actual earning and forecast earning. This will identify the dispersion and error between the actual and forecast earnings. 6.2 Measure the forecast Accuracy To measure the accuracy, this study follows the previous study done by Duru and Reeb (2002). For each firm-year 2006 to 2009, this study will estimate the ACCURACY as the total different between the IBES consent forecast of annual earnings (made 9 months before the earnings announcement date) and the actual annual earnings which reported by IBES. ACCURACY = (-1) (FCAST-ACTUAL) PRICE Where ACTUAL is the actual annual earnings which reported by IBES; FCAST is the consent analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast made nine months before the end of the fiscal year; and PRICE is the closing stock price one day before the consent analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. 6.3 Measure of Corporate Governance This study will use Annual Report of the selected companies to obtain the corporate governance information. This study will look into four (4) dimensions under the corporate governance factors; the independent of the Board, the size of the Board, the à ¢Ã¢â€š ¬Ã…“CEO Dualityà ¢Ã¢â€š ¬? structure and the independent of Audit Committee. Based on the information, this study will estimate four (4) proxies for a company. This study will use EVIEWS software to analyse the descriptive, univariate and multivariate regression. 6.4 Control Variables When estimating the relationship between the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast and the corporate governance, this study include two sets of control variables. The first control variable is ownership structure and second control variable is forecast horizons that affect the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. Since this study measure four (4) proxies for corporate governance at the end of prior year, this study will also measure the ownership structure and forecast horizon at the same time. At the end current year, which is the same time this study measure accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. 7.0 Expected Findings This study expected the corporate governance will influence the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast in selected to Malaysian public listed companies. This result will consistent to previous study finds that better corporate governance tends to issue more specific accuracy of the analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast (Ajinkya, Bhoraj, Sengupta, 2005). Byard and Weintrop (2006) find better corporate governance firm contribute to better analyst forecast. To examine the affect on the corporate governance, this study examines few dimensions under corporate governance which effect the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. This study expected the hypotheses conducted under study will result consistent with the previous result. 7.1 Relationship between the independent of Board and Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast This study expects the findings will shows the independent of board has positively associated with the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. Then, this finding is consistent with previous study; the independent board of director has significantly positive relationship with the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast (Byrad, Li, Weintrop, 2006). This outcome will show the situation of selected companies whether the corporate governance practise in the companies contribute to achieve accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. 7.2 Relation between the Size of Board and Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. This study expects the findings will shows the size of board has negatively associated with accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. This is consistent with previous study by Yermack (1996) find larger board reduce the board effectiveness. The size of the recommended board is not discover by previous researcher, however, the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast which measures under dispersion and error will determine the appropriate size for the selected companies. 7.3 Relationship between the à ¢Ã¢â€š ¬Ã…“CEO Dualityà ¢Ã¢â€š ¬? Structure and Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast This study expects the finding will shows the CEO Duality has negatively associated with the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. This is consistent with previous study that finds the presence of CEO Duality in organization has significantly negative relationship with the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast (Byrad, Li, Weintrop, 2006). Most of the Malaysian companies exist the present of CEO Duality structure. Thus, this dimension will clarify how the selected companies practice their corporate governance in the companies. 7.4 Relationship between the Independent of Audit Committee and Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. This study expects the findings will shows the Independent of audit committee has positively associated with the Accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast. This is consistent with the previous study by Klein (2002b) finds that less independent of audit committee cause decreases in earning management. Thus, the result of this finding will provide the effect of independent audit committee role in the selected companies contribute toward the accuracy of analystsà ¢Ã¢â€š ¬Ã¢â€ž ¢ forecast.