Authors: Panagiotis Dimitropoulos, Stergios Leventis, Emmanouil Dedoulis

Title: Financial Regulation Intervention and Accounting Quality

Abstract

In this paper, we examine whether the quality of financial reporting deteriorates when corporate viability is pursued through regulation and monitoring tied to accounting data. We focus on the European football industry, an ideal setting due to the introduction of a new regulatory framework aimed at improving corporate financial robustness. Our results indicate that the imposition of strict financial regulation has led to a new era associated with increased earnings management, reduced conditional conservatism and auditor switching to a non-big-4. We offer important implications for regulators and market participants alike.