摘要：This paper seeks to answer the questions concerning the current level of bias and accuracy associated with theIPO earnings forecasts and the explanations behind forecasts errors. Using 190 Malaysian IPOs, we found thatthe Malaysian IPO earnings forecasts during the period of study (2002-2012) were pessimistic (i.e., the earningsforecasts were underestimated), proposing that Malaysian IPO directors are, averagely unbiased and cautiousforecasters. Moreover, we found the percentage of accuracy of Malaysian IPO earnings forecasts to beunsatisfactory. However, the percentage shows some improvement for the accuracy of earnings forecasts overtime. Further, content analysis was used to explore the explanations provided behind the forecasts errors. Thisstudy found that, the number of provided explanations in first published annual report of IPO company wasgreater when the management of IPO companies were more optimistic in making their earnings forecasts (i.e.,the earnings forecasts were over-forecasted) and when the forecasts errors were large. These results haveimplications for the capital market participants like regulators and investors.
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