The large number of corporate failures over the last few decades has compromised the credibility of financial reporting. Earnings management (EM) is increasing in firms at an alarming rate, although many rules and standards are used in the preparation of financial statements. The purpose of this study is to examine the effects of external audit and audit committee (AC) features on accrual earnings management in Pakistan. The study collected data from 150 non-financial firms listed on the Pakistan Stock Exchange (PSX) between 2013 and 2020. The econometric techniques used in the study are the fixed or random effects approach and the GMM technique. The study findings showed that AC size, AC independence, AC activity, and audit fee can greatly reduce EM, thus supporting the agency theory argument. The study findings may help management and policymakers develop a more comprehensive policy to strengthen and effectively manage the corporate governance (CG) mechanism. The study also offers a new paradigm for investors and stock market participants to improve their investment decisions.