ABSTRACT: This study investigates the impact of the mandatory conversion to IFRS on Earnings Quality of all Saudi companies listed on Saudi Stock Exchange (Tadawul), except for banks, insurance and REITs sectors. This research uses earnings persistence to measure the Quality of Earnings in Saudi Arabia. The sample data was collected for years— 2016, 2017 and 2018— from Tadawul. The results of the study confirmed that SOCPA is associated with high earnings persistence which means earnings are accompanied by increased ability to maintain the current earnings and thus, they are associated with higher earnings quality. The results also confirmed that IFRS also has high earnings persistence, which means that the earnings are of high quality for IFRS, the higher the earnings persistence, the higher the earnings quality and vice versa. Based on the empirical evidence, the result for difference between SOCPA and IFRS reveals that it is not significant. As such, it can be concluded that IFRS and SOCPA do not have difference in the earnings persistence of Saudi Company. This study is significant as it provides evidence on the effect of the mandatory adoption of IFRS on quality of earnings of Saudi companies listed on Tadawul Stock Exchange.

KEYWORDS – Earnings Persistence, Earnings Quality, SOCPA, IFRS, Saudi Arabia