The Presence of Earnings Management After the Introduction of Financial Fair Play

Sammanfattning: In this study we investigate whether earnings management has increased since the UEFA Financial Fair Play was introduced and if there is a relationship between clubs' earnings management and their on-field performance. We use two different models to identify earnings management in a sample of football clubs playing in the Premier League during the period 2004-2017. Our findings support an increase in earnings management after the regulation was implemented and show that there is a positive relationship between clubs' performance on the field and their manipulation of earnings. These results are in line with previous research on data on other national football leagues in Europe. Our findings also contribute to the concept of earnings management in a setting where firms are not necessarily profit maximizers.