A Premier League independent commission has found that Manchester City artificially inflated its financial position by more than £900mn over nine years, using "sham" commercial deals to overstate income. City rejects the findings and has launched an appeal. The commission said the club "filed misstated accounts and concealed the true state of its finances from its auditors and football regulators."
Those auditors were BDO, the UK's fifth-biggest accounting firm, which describes itself as the football "market leader" and works with more Premier League and Championship clubs on deals, audits and tax advice than any rival. A Big Four audit veteran said the firm faces "battlegrounds" on several fronts and must contain brand damage while reassuring other clients that its audit work is reliable.
Although the commission found City deliberately hid its true finances from BDO, regulators will still consider whether the firm did enough to scrutinise the transactions it was shown and apply the professional scepticism expected of it. The Financial Reporting Council has powers to investigate BDO and the accountants who prepared City's statements, but it has not opened probes into either and is examining the scope of its jurisdiction.
The case also raises a wider question about the UK audit regime. Football clubs of City's size, including City itself, are not classified as "public interest entities," meaning their audits do not face the tougher oversight applied to listed companies, banks and insurers. The Institute of Chartered Accountants in England and Wales, which regulates the audits of almost all football clubs, had already investigated several club audits from 2023 onwards over creative accounting concerns. BDO declined to comment, citing legal and professional confidentiality requirements.
Source: Financial Times Companies · Summarized by HeadlinesBriefing