The UK audit regulator has confirmed it is leading inquiries into accounting irregularities at Manchester City. The Financial Reporting Council told the House of Commons business select committee that it took over "regulatory consideration" of the case from the Institute of Chartered Accountants in England and Wales on 30 September. No formal investigation has started, but the FRC is making inquiries.
The move follows an independent commission finding Manchester City guilty of all charges relating to breaches of the Premier League's financial regulations between the 2009-10 and 2017-18 seasons, including artificially inflating the club's financial position by more than £900m. City are appealing the verdict.
The FRC has greater resources and powers to apply sanctions if it finds evidence of violations. It routinely oversees accounting standards at large institutions such as listed public companies, but not football clubs. It can examine the conduct of BDO, Manchester City's auditors, and can sanction individuals such as directors or employees who are members of professional accountancy bodies. BDO, the UK's fifth-biggest accounting firm, claims to be a market leader in football. The commission found the club gave a "misleading impression" of a scheme used to disguise the origin of shareholder funds, and that its auditors were "unaware" of the scheme.
Liam Byrne, chair of the business select committee, called for greater FRC powers to examine similar cases. He said the regulator's letter "exposes gaps in its ability to compel evidence from the club and pursue directors who fall outside its disciplinary rules," and asked the government to explain why reforms to close these gaps were abandoned. BDO declined to comment.
Source: BBC Sport Football · Summarized by HeadlinesBriefing