| This research aims to investigate the relationship between good corporate governance (using proportion of independent commissioner and proportion of female audit committee as a proxy) and financial leverage as exogenous variables, as well as earnings management and stock return as endogenous variables in first research model. In the second research model, the author will analyze the effect of audit quality as a moderating variable on those relationships in order to explain the relationship between those variables more comprehensively. Analysis is done on 257 sample data from manufacturing companies that listed in Indonesia Stock Exchange from 2010-2014. Using path analysis on first model, the result showed that from 3 variables that are hypothesized to have relationship with earnings management, proportion of female audit committee has a negative effect, while financial leverage has a positive effect on earnings management. Then, from 4 variables that are hypothesized to effect stock return, only earnings management that has negative effect on stock return. Lastly, using multiple group analysis on the second research model, the authors find evidence that audit quality has a moderating effect on relationship between financial leverage and earnings management as well as earnings management and stock return. |