The United Kingdom’s audit watchdog has confirmed that it is examining alleged accounting issues involving Manchester City.
In a letter to the House of Commons business select committee, the Financial Reporting Council said it assumed responsibility for the case’s “regulatory consideration” from the Institute of Chartered Accountants in England and Wales on 30 September.
Although a formal investigation has not been launched, the FRC is conducting preliminary inquiries into the matter.
The development follows an independent commission’s decision that Manchester City had committed breaches of Premier League financial rules between the 2009-10 and 2017-18 seasons. The findings included claims that the club overstated its financial position by more than £900m. Manchester City is challenging the ruling.
The FRC has broader authority and more resources to impose penalties if evidence of wrongdoing is identified. Its usual responsibilities include supervising accounting standards at major organisations, such as publicly listed companies, rather than football clubs.
The regulator may review the work of BDO, Manchester City’s auditor, to determine whether its audit complied with the relevant requirements.
It may also sanction individuals connected to the Etihad club, including directors and employees, provided they belong to professional accounting organisations.
BDO is the fifth-largest accounting firm in the United Kingdom and describes itself as a leading adviser in football, working with more Premier League and Championship clubs than its competitors.
According to the independent commission, Manchester City presented its auditors with a “misleading impression” of an arrangement intended to conceal the source of shareholder money invested in the club. The auditors were reportedly “unaware” of that arrangement.
Manchester City has confirmed that it will appeal the commission’s decision, maintaining that the ruling includes significant mistakes relating to law, principle and fact, and cannot be considered reliable.
Liam Byrne, who chairs the business select committee, urged the government to give the FRC stronger powers to examine comparable cases.
Writing on X, Byrne said the regulator’s letter revealed limitations in its power to obtain evidence from the club and take action against directors who are not covered by its disciplinary framework.
He said these limitations created significant concerns about whether companies and their directors could be held properly accountable.
Byrne also called on the government to explain why proposed reforms addressing those shortcomings had been dropped and what measures would now be introduced to improve accountability.
BDO chose not to provide a comment.
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