INDEPENDENT COMMISSIONERS AS A GOVERNANCE MECHANISM IN MODERATING THE RELATIONSHIP BETWEEN MANAGERIAL CHARACTERISTICS AND EARNINGS FORECAST ACCURACY

Abstract

This study addresses the problem of earnings forecast inaccuracy arising from managerial characteristics that may introduce bias into financial projections, thereby reducing the reliability of information used by investors and other stakeholders. The purpose of this research is to examine the role of independent commissioners as a corporate governance mechanism in moderating the relationship between managerial characteristics and earnings forecast accuracy. This study employs a qualitative research approach using a library research method. Data are collected from reputable academic journals, scholarly articles, and relevant literature published in recent years that discuss corporate governance, managerial behavior, and earnings forecasting. The analysis is conducted through content analysis to identify patterns, relationships, and key insights regarding the moderating function of independent commissioners. The results indicate that managerial characteristics such as experience, overconfidence, and risk preference significantly influence earnings forecast accuracy; however, the presence of independent commissioners can mitigate managerial bias by providing objective oversight and strengthening governance quality. The study concludes that independent commissioners play a critical role in enhancing the credibility and accuracy of earnings forecasts by balancing managerial discretion and promoting transparent, data-driven forecasting practices. These findings highlight the importance of effective board independence in improving financial reporting quality and supporting informed decision-making.