USING EFFICIENT CONTRACTING THEORY TO FIND OUT THE COMPANIES’EARNINGS QUALITY

Profit is one of the information from financial statements that still considered by investors or creditors. Therefore, accounting profits have good quality are important for potential and creditors in making right decisions. Management has an regarding condition company likely to change exaggerate existing information, so efficient contract requests coming lenders shareholders. This study aims examine effect leverage, outstanding shares, corporate governance on earnings manufacturing companies listed Indonesia Stock Exchange (IDX) during 2020. Leverage measured Debt Asset Ratio (DAR), shares Cummulative Abnormal Return (CAR), 1st level ASEAN Corporate Governance Scorecard (ACGS), ratio. The number samples this were 104 was taken purposive sampling technique, tested using multiple linear analysis method, processed SPSS Statistics 25 software. results show a positive quality, while leverage no quality.