Vol. 11., No. 2, Hal: 195 – 209; November 2022 ISSN: 2656-4955 (media online) 2656-8500 (media cetak) 195 *Corresponding THE ROLE OF AUDIT COMMITTEE CHARACTERISTICS AND AUDIT QUALITY IN IMPROVING EARNINGS QUALITY Ika Rahmawati 1 , Jacobus Widiatmoko 2 *, Maria Goreti Kentris Indarti 3 1,2,3 Fakultas Ekonomika dan Bisnis, Universitas Stikubank Jl. Kendeng V Bendan Ngisor, Semarang, Indonesia *jwidiatmoko@edu.unisbank.ac.id Received: 10/08/2022 ;Revised: 22/11/2022; Published: 30/11/2022 ABSTRACT The existence of an audit committee in a company, as regulated by the financial services authority, is still questionable about its effectiveness in influencing the quality of the company's financial statements. Likewise, the characteristics of the public accounting firm used by the company, can it improve the quality of the financial statements presented by the company. The purpose of this study was to examine the effect of audit committee effectiveness, as measured by committee size, number of meetings, and competence, as well as audit quality on earnings quality with firm size, leverage, and profitability as control variables. The population of this study is all manufacturing companies listed on the Indonesia Stock Exchange in 2018- 2020. The sample selection method used purposive sampling and 292 data were obtained. The results of hypothesis testing with multiple linear regressions showed that the size of the audit committee and audit quality had a positive effect on earnings quality. Meanwhile, the number of meeting and competence has no effect on the quality of earnings. Furthermore, all control variables affect earnings quality. Keywords: Audit committee effectiveness; audit quality; earnings quality; firm size; leverage; and profitability INTRODUCTION Financial statements are the result of a financial accounting process. It contains vary financial information as management's responsibility in managing the company for a certain period (Cahyani & Khafid, 2020). Earnings are very important component of financial statements for users of financial statements (Anggrainy & Priyadi, 2019). Earnings are generally a guide for internal and external users in making various decisions (De Simon, 2016; Widiatmoko & Indarti, 2019). Quality information will only be obtained from companies with high earnings quality. High earnings quality will provide more information about the company's financial performance that is relevant for decision making (Dechow et al, 2010; Soly & Wijaya, 2017; Wati & Putra, 2017). Earnings quality are earnings that reflect the company's real financial performance (Kurniawan & Aisah, 2020), so that it can be the basis for investors to make the right decisions in investing (Murniati et al., 2018). Earnings quality must meet the qualitative characteristics of financial statements, namely relevant and reliable (Silfi, 2016), which is an important indicator in assessing the company's prospects in the future. However, the phenomenon shows the opposite. The urge to increase company profits has triggered management to commit fraudulent actions by engineering the profits presented. The fraudulent actions carried out led to the low quality of earnings, so that the profits presented were biased (Soly & Wijaya, 2017). The fraudulent financial statements, among others, were perpetrated by PT Envy Technologies Indonesia Tbk. In the 2019 period, PT Envy Technologies Indonesia Tbk has recorded revenues of Rp. 188.58 billion, up 135% compared to the income presented in the 2018 annual financial statements of Rp. 80.35 billion. Meanwhile, the net profit presented in the 2019 annual financial statements was Rp.