Man City: UK audit regulator makes inquiries into accounting

The UK audit regulator is making inquiries into accounting irregularities at Manchester City, following a step-up in oversight. The Financial Reporting Council (FRC) said it took over “regulatory consideration” of the case from the Institute of Chartered Accountants in England and Wales on 30 September, but stressed that no formal investigation has started.

As BBC Sport reports, the FRC has more resources and stronger powers to impose sanctions if it finds evidence of rule breaches. The trigger is an independent commission’s decision finding the club guilty on all charges over Premier League financial rule breaches between 2009-10 and 2017-18, including an alleged artificial inflation of the club’s financial position by more than £900m. City are appealing that ruling.

Scrutiny of the auditors

The regulator can also look into BDO, the club’s auditors, to assess whether the audit complied with the rules. It could apply sanctions to individuals such as directors or employees if they are members of professional accountancy bodies.

The commission said Manchester City gave auditors a “misleading impression” of the scheme used to disguise where shareholder funds came from, with auditors described as “unaware” of the plan. City say the decision includes “material errors of law, principle and fact and is unsafe”.

Liam Byrne, chair of the business select committee, called for tougher powers for the FRC and wrote on X that the regulator’s letter exposes gaps in compelling evidence and pursuing directors outside its disciplinary reach.