| This study was conducted to examine the effect of the application of corporate governance and management stock options on earnings restatement occurrence that can be seen on the first research model. In addition, this study also tried to examine the effect of earnings restatement on earnings quality is seen in second research model. In this study, we use two research models. The first model use the application of corporate governance (represented by proportion of independent directors, board size, independent audit committee, and audit quality) and management stock option as independent variables, and use occurrence of earnings restatement as the dependent variable. For the second model, we will use occurrence of earnings restatement and use earnings quality as the dependent variable. The study was using logistic regression for the first model, while use general linear for the second model. The study used 267 samples for the first model and 362 samples for the second model conduct upon non financing companies listing in Bursa Efek Indonesia in the period of 2009 - 2011. The findings show that application of corporate governance (represented by proportion of independent directors, board size, independent audit committee, and audit quality) and management stock affect on occurrence of earnings restatement. In the second model, we find that occurrence of earnings restatement doesn’t affect earnings quality. |