The UK audit regulator has confirmed it is leading inquiries into accounting irregularities at Manchester City. The Financial Reporting Council confirmed in a letter to the House of Commons business select committee it had taken 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 into the case. It comes after Manchester City were found guilty by an independent commission of all charges relating to breaches of the Premier League’s financial regulations between the 2009-10 and 2017-18 seasons, including by artificially inflating the club’s financial position by more than £900m.
City are appealing the verdict. The FRC has greater resources, and greater powers, to apply sanctions if it does find evidence of violations. It routinely oversees accounting standards at bigger institutions such as listed public companies, but not football clubs. The FRC can look into the conduct of BDO, Manchester City’s auditors, to ask whether the audit was in line with the rules.
It can also apply sanctions to individuals such as directors or employees of the Etihad club, if they are members of professional accountancy bodies. BDO is the UK’s fifth-biggest accounting firm, but claims to be a market leader in football, advising more Premier League and Championship clubs than any other firm. The independent commission which looked into Manchester City found that the club gave a “misleading impression” of the scheme used to disguise the origin of shareholder funds injected into the club to its auditors, who were “unaware” of the scheme. Manchester City have said they will appeal against the commission’s decision, arguing that it contains “material errors, of law, principle and fact and is unsafe”.
Liam Byrne, chair of the business select committee, called for greater powers for the FRC to look into similar cases. He wrote on X: “The regulator’s letter exposes gaps in its ability to compel evidence from the club and pursue directors who fall outside its disciplinary rules. “This raises serious questions about the powers available to hold companies and directors to account. “The government has a responsibility to explain why reforms to close these gaps were abandoned – and what will now be done to strengthen accountability.” Man City confirm appeal against guilty verdict
