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This research is aimed to (1) examine effect of REM on firm value (2) examine effect of market share, financial health, and effective tax rate on relationship between REM and firm value. This research use manufacture firms listed in Indonesian Stock Exchange 2013-2015 as research sample. REM is measured by aggregate of abnormal CFO, abnormal production and abnormal discretionary expenses. In general, the result shows that REM have negative effect on firm value, indicates that REM can destroy economic value. REM have positive effect on firm value, if market share and financial health is high, indicates that REM could gives signal of competitive advantage that firm have better industry position and financial condition to increases firm value. Effective tax rate have no effect between relationship REM and firm value, indicates that there is possibility low effective tax rate does not come from efficient tax planning but costly aggressive tax planning.

Firm Value; Real Earnings Management