ABSTRACT:

The study aims at investigating the impact of financial and operating risks on earnings quality of listed commercial banks in Jordan. The study also investigates the impact of COVID-19 pandemic on both risk levels and earnings quality. Data was collected from the quarterly financial statements of all thirteen listed banks during the period from quarter one of 2019 to quarter three of 2020. The descriptive analysis results reveals that credit and operating risks have increased significantly during the pandemic period while earnings quality has decreased. Moreover, the multiple regression analysis results show that credit risk and the pandemic have a significant negative impact on earnings quality, while liquidity risk has a significant positive impact on earnings quality. The study concludes with several recommendations for bank managers and regulators to lessen banks reliance on government interventions during financial crises and enhance the quality of earnings in the Jordanian banking sector.