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The objective of this study is to observe the effect of corporate governance index on external audit fee of public companies listed on Indonesia Stock Exchange. Two theories are used to explain the the effect, substitution theory  and signaling theory. ASEAN Corporate Governance Scorecard is used to represent the corporate governance index.  51 firms were observations (all companies listed in IDX, except financial services, that published audit fees in the period of observation) are used in this study (17 sample companies during the year 2010-2012). Statistical results, based on Random Effect, show that both theories may be used in explaining the effect. The rights of shareholders and disclosure & transparency affected audit fee negatively, while equitable treatment of shareholders and responsibilities of the board affect audit fee positively. Overall, the signaling theory explained more the effect of corporate governance index on external audit fee in Indonesia.

corporate governance index; external audit fee; substitution theory; signalling theory; ASEAN Corporate Governance Scorecard