External financing is an activity that needs to be considered by company in order to expand its operation. Previous research shows that debt financing and equity financing, in the form of public ownership, affect companies’ financial reporting quality. The objective of this study is to investigate whether external financing affects companies’ financial reporting quality. Moreover, this study also wants to investigate whether related party transaction affects the relationship between external financing and financial reporting quality. This research employed a panel data with Indonesian non-financial listed companies within the year 2013-2015 as the population. This research employed data from 176 non-financial companies with total observation of 528. This research found a non-significant relationship between debt financing and earnings quality. Meanwhile, equity financing has negative effect on companies’ financial reporting quality. This study found that related party transactions has no significant effect on the relationship between debt financing and financial reporting quality. Related party transactions also has no significant effect on the relationship between equity financing and financial reporting quality.