This study aims to examines the effect of fair value accounting on earnings management. This study also tests whether audit quality can reduce the effect of fair value accounting on earnings management. The study was conducted on all companies listed in Indonesia Stock Exchange 2012-2015 except for financial sector companies. These results indicate that measurement of fair value accounting contained  in net income have not a significant effect on earnings management. While the measurement of fair value accounting contained in other comprehensive income have a positive effect on earnings management. This result also shows that the quality of auditor weaken the influence of fair value accounting contained in net income and other comprehensive income on earnings management. Furthermore, the analysis of the result show that the use of measurement level 2 and 3 fair value accounting hierarchy contained in net income have a positive effect on earning management. The result of the study confirmed that the fair value measurement allowed the judgment from management can be used opportunistically to do earnings management. We also found that level 1 fair value accounting hierarchy contained in other comprehensive income have positive effect with earning management. Other findings are auditors can weaken the influence of the use of level 2 and 3 fair value accounting hierarchy contained in net income on earnings management and auditor may weaken the effect of the level 1 fair value accounting hierarchy contained in other comprehensive income on earnings management. Overall, the results of the research show evidence to support that fair value can be used as an alternative management for higher earnings management. Then auditors who have good quality can reduce opportunity of management to use fair value measurement for earnings management.