Thesis (MBA) - Cyprus International University. Institute of Graduate Studies and Research Business Administration

This thesis explores how accounting data on leverage and financial hardship helps football teams apply conservative principles by providing an in-depth analysis of Financial Fair Play (FFP) laws in the English Premier League. The study is to investigate the relationship between financial difficulty and conservative in club accounting practices, evaluate the combined effects of leverage and financial distress on conservatism, and evaluate the impact of FFP on leverage. Financial reports from publicly traded football clubs premier league clubs on the London Stock Exchange from 2020-2022 were meticulously analyzed. This approach provides comprehensive insights into financial performance, leverage, and potential financial distress indications.
Panel regression testing demonstrated significant relationships between leverage, financial distress, and the application of conservatism principles. Higher leverage positively correlated with conservatism, indicating managerial adherence to conservative practices. Financial distress similarly influenced conservatism positively, reflecting managerial caution amid uncertain financial conditions. Consistent intercept and slope coefficients over three years underscored enduring relationships, with the F-test confirming overall model significance. Positive relationships identified with leverage and financial distress highlight the pivotal role of external factors in shaping managerial decisions related to financial reporting. The varying intercept over the years suggests adaptability to changing conditions. Dummy variables for specific years did not significantly impact conservatism, affirming the robustness of identified relationships over time.