This study aims to analyze the difference in earning quality and potential bankruptcy of Islamic banks before and after the adoption of IFRS and to analyze the relationship of earnings quality and potential bankruptcy to the operating cash flow of Islamic bank. Data obtained from the financial statements of 12 Islamic banks in Indonesia and 17 Islamic banks in Malaysia with financial reporting period from 2010 to 2016. Earning quality is measured by discretion of loan loss provision and the potential bankruptcy of Islamic banks is measured using the Altman z score model. The results show that the earning quality of Islamic banks did not have significant differences between before and after IFRS adoption. While Islamic banks in Malaysia have significant differences between before and after the adoption of IFRS. Islamic banks in both countries do not have the potential bankruptcy difference between before and after IFRS adoption. The earnings quality decreased when the potential bankruptcy at high levels.