The study aims to compare whether using Earnings Response Coefficient (ERC) is better than using the new concept of Accounting Earnings Response Coefficient (AERC) in determining the earnings quality response coefficient value. Also, the study seeks to explain the effect of company characteristics and corporate governance on AERC through voluntary disclosure and information asymmetry. Research samples include 69 manufacturing companies listed on the Indonesian Stock Exchange over the period 2014-2017. The data come from annual reports, stock market prices, CSPI, EPS, stock returns and market returns. The research model is tested using the structural equation model (SEM) with partial least square (PLS). The results showed the value of the earnings response coefficient produced by AERC and ERC was different. Earnings quality resulting from AERC regression by adding CFO values better reflects the actual earnings quality. These results are consistent with the concept built from the proposition about earnings quality at AERC, that quality earnings are informative accounting earnings. The theoretical findings of this study provide an explanation that operational cash flow plays a role in evaluating earnings quality, while providing reinforcement that the ERC regression model fails to detect stock market reactions to information relevant to the aggregated values of accounting earnings.

Abstract
1. Introduction
2. Literature Review
    2.1. Synthesis of Accounting Earnings ResponseCoefficient (AERC)
    2.2. Variable Corporate Governance
3. Methodology
4. Results and Discussion
    4.1. Testing the Results of Synthesis
    4.2. AERC Model Test Results
    4.3. The Effect of Corporate Governance onInformation Asymmetry
    4.4. Effect of Company Characteristics onAccounting Earnings Response Coefficient
    4.5. The Effect of Corporate Governance onAccounting Earnings Response Coefficient
    4.6. The Influence of Voluntary Disclosure onAccounting Earnings Response Coefficient
    4.7. Effect of Information Asymmetry onAccounting Earnings Response Coefficient
5. Conclusion
References

• Ratna Wijayanti Daniar PARAMITA(Doctoral Program in Management Science, Universitas Jember) Corresponding Author
• Isti FADAH(Doctoral Program in Management Science, Universitas Jember)
• Diana Sulianti K. TOBING(Doctoral Program in Management Science, Universitas Jember)
• Imam SUROSO(Doctoral Program in Management Science, Universitas Jember)