A review of the financial reporting changes within Gozitan football clubs : the quest for improved accountability

Abstract

Given the increasing number of clubs around the world which have run into financial difficulties in the last decade, and the lack of transparency and accountability in their financial administration, it is essential that national football associations enforce a financial club licensing system to improve club governance. This research evaluates how the level of financial reporting within Gozitan football clubs has changed from the early 1990s onwards. The possibility of enforcing a financial club licensing system based on the Union of European Football Associations (UEFA) financial criteria is tested. Data have been collected mainly from interviews with past and current officials of the Gozo Football Association (GFA). These have been also complemented by an analysis of 14 interviews with representatives of member clubs. GFA member clubs who participated in the top division in the previous two seasons have been targeted. Only financial criteria have been taken into consideration in setting-up a club licensing system. The study highlights the positive effects that the election of a member of the accountancy profession at the helm of the GFA had on the financial reporting of its member clubs. Results obtained have shown that the implementation of additional financial tools in a phased manner, apart from improving the existing historic annual financial statements, should improve the overall accounting practice within football clubs and the quality of the clubs' financial administration. The natural corollary is the achievement of UEFA's objectives i.e. an increase in transparency and accountability of the clubs' financial aspect and the protection of creditors