The Premier League's independent commission found that Manchester City artificially inflated its financial position by more than £900mn over nine years, using "sham" commercial deals and filing misstated accounts. City rejects the findings and has launched an appeal. Its auditors, BDO, the UK's fifth-biggest accounting firm and self-described football "market leader", now face intense scrutiny.
The firm is expected to face challenges on several fronts, needing to contain brand damage and reassure clients. Regulators will assess whether BDO exercised the professional scepticism expected of it after City deliberately concealed its true finances. The scandal has also exposed a broader issue: even clubs of City's size are not classified as "public interest entities", meaning their audits avoid the tougher oversight applied to listed companies, banks and insurers.
The Institute of Chartered Accountants in England and Wales produced a training film shown to BDO staff about fraudulent transactions at a fictional club. The Financial Reporting Council has powers to investigate BDO but has not opened probes, saying it is examining the scope of its jurisdiction. BDO declined to comment, citing legal and professional confidentiality requirements.
Source: Financial Times Companies · Summarized by HeadlinesBriefing