Does IFRS Adoption Improve Analysts’ Earnings Forecasts? Evidence from Saudi Arabia

Taoufik Elkemali ()
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Taoufik Elkemali: Accounting Department, School of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia

Risks, 2025, vol. 13, issue 8, 1-19

Abstract: This study explores how IFRS adoption is associated with analysts’ forecast accuracy, optimism, and dispersion in Saudi Arabia. Drawing on data from publicly listed firms from 2013 to 2020, we assess changes in forecasting behavior surrounding the IFRS transition, accounting for firm-specific and macroeconomic factors. We argue that IFRS is expected to support more transparent financial statements, reduce risk and uncertainty, and offer a standardized and detailed reporting framework that influences analysts’ predictive performance. The findings reveal more accurate forecasts and a decline in both optimism and dispersion following IFRS adoption, suggesting enhanced financial reporting quality and reduced uncertainty. These associations underscore IFRS’s potential role in refining analysts’ earnings predictions and promoting stock market transparency.

Keywords: IFRS adoption; financial disclosure; analysts’ earnings forecasts; risk and uncertainty; accuracy; optimism; dispersion (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jrisks:v:13:y:2025:i:8:p:152-:d:1724540

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