This study empirically investigates whether related party transactions play an important role in earnings management in Hong Kong Stock Exchange, by using manually collected data comprising 1,278 firms’ yearly observations from all listed company on Hang Seng Composite Industry Indexes from 2016 to 2018. This study analyzes the three most frequent types of related party transactions, including related sales, related lending and related borrowing, and to examine their associations with earnings management. The findings suggest that companies did not have abnormally high level of related party transactions when they have earnings management incentives. Related party transactions are not used in income smoothing or to inflate earnings in Hong Kong Stock Exchange. This study may provide insights to investors on how companies use related party transactions to manipulate earnings.