Abstract: Aim To discuss the effect of audit quality on earnings management (EM) in listed companies. Methods By Analyzing the situation of EM in listed companies in China and the situation of audit market, the factors of audit quality to affect EM and the way to improve the audit quality were discussed. Results Audit quality has effects on EM in listed companies. Conclusion To prevent EM, it is necessary to improve audit quality by improving the auditor's capacity, increasing the input of audit, and assuring the independence of audit.