Audit Regulator Investigates Manchester City Accounting Practices
The UK audit regulator has confirmed it is leading inquiries into accounting irregularities at Manchester City, following findings by an independent commission.
According to a letter from the Financial Reporting Council (FRC) to the House of Commons business select committee, they took over "regulatory consideration" of the case on September 30th.
While no formal investigation has begun, the FRC is currently making inquiries into the situation. This comes after Manchester City were found guilty of breaches of Premier League financial regulations between 2009-10 and 2017-18, including artificially inflating their financial position by over £900m.
The FRC, with its greater resources and powers, can now delve into the conduct of Manchester City's auditors, BDO, to ensure the audit complied with regulations. They can also apply sanctions to individuals associated with the club, provided they are members of professional accountancy bodies.
BDO, the UK's fifth-largest accounting firm, claims to be a market leader in football. The independent commission found that Manchester City gave a misleading impression of their financial schemes to auditors who were unaware of the true origins of funds.
Manchester City have appealed the commission's decision, arguing errors in the report. Liam Byrne, chair of the business select committee, called for enhanced powers for the FRC to handle similar cases, highlighting gaps in their current ability to compel evidence and pursue directors.
BDO declined to comment on the matter.