LONDON, ENGLAND — The Financial Reporting Council has confirmed it is now leading inquiries into accounting irregularities at Manchester City, according to a report. The UK audit regulator has taken over regulatory consideration of the case.
The FRC confirmed the development in a letter to the House of Commons Business Select Committee. It said it took over the case from the Institute of Chartered Accountants in England and Wales on September 30 .
No Formal Investigation Yet
The FRC said no formal investigation has started. But the regulator is making inquiries into the case .
The development follows the independent commission’s verdict. The commission found Manchester City guilty of all charges related to serious breaches of the Premier League’s financial rules. The breaches occurred between the 2009-10 and 2017-18 seasons. The club artificially inflated its financial position by more than £900 million .
Manchester City are appealing the verdict. The club has described the decision as containing “material errors of law, principle and fact” .
FRC’s Powers
The FRC has greater resources and greater powers to apply sanctions if it finds evidence of violations. It routinely oversees accounting standards at bigger institutions such as listed public companies. But it does not typically oversee football clubs .
The regulator can look into the conduct of BDO, Manchester City’s auditors. It can ask whether the audit was in line with the rules. It can also apply sanctions to individuals such as directors or employees of the club, if they are members of professional accountancy bodies .
BDO is the UK’s fifth-biggest accounting firm. It claims to be a market leader in football, advising more Premier League and Championship clubs than any other firm .
The Commission’s Findings
The independent commission found that Manchester City gave a “misleading impression” of the scheme used to disguise the origin of shareholder funds injected into the club. The commission said the club’s auditors were “unaware” of the scheme .
MP Calls for Stronger Powers
Liam Byrne, chair of the Business Select Committee, called for greater powers for the FRC to look into similar cases. He wrote on X that 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,” Byrne wrote. “The government has a responsibility to explain why reforms to close these gaps were abandoned – and what will now be done to strengthen accountability” .
What This Means
The FRC’s involvement adds a new layer of scrutiny for Manchester City. The club is already facing the Premier League’s disciplinary process. The audit regulator’s inquiries could lead to separate sanctions for the club’s auditors and directors.
The case highlights the broader question of accountability in football governance. It also raises concerns about the effectiveness of audit processes in detecting financial irregularities at football clubs.
What Happens Next
The FRC will continue its inquiries. It will determine whether to open a formal investigation. Manchester City will continue with its appeal against the Premier League commission’s verdict.
For now, the club faces uncertainty on multiple fronts. The outcome of both processes will shape the future of Manchester City and the Premier League.
