UK Audit Regulator Takes Over Man City Accounting Case Amid Financial Rule Controversy

The UK's audit regulator is now leading inquiries into accounting irregularities at Manchester City, though no formal investigation has begun.

The Financial Reporting Council (FRC) told the House of Commons business select committee in a letter that it took over "regulatory consideration" of the case from the Institute of Chartered Accountants in England and Wales on 30 September.

The move comes after an independent commission found City guilty of all charges linked to breaches of the Premier League's financial rules between the 2009-10 and 2017-18 seasons. The commission said the club had boosted its financial position by more than £900m on paper. City are appealing the verdict.

The FRC has more money and stronger powers than the ICAEW when it comes to handing out punishments if it finds evidence of wrongdoing. It usually keeps an eye on accounting standards at big firms like listed public companies, not football clubs.

It can look into how BDO, City's auditors, handled the club's books and check whether the audit followed the rules. It can also punish people such as directors or staff at the Etihad club, as long as they belong to a professional accountancy body.

BDO is the fifth-biggest accounting firm in the UK. It says it leads the market in football and works with more Premier League and Championship clubs than any other firm. The firm declined to comment.

The commission found that City gave their auditors a "misleading impression" of the scheme used to hide where shareholder money put into the club came from. It said the auditors were "unaware" of the scheme.

City have said they will fight the ruling. They argue that it contains "material errors, of law, principle and fact and is unsafe".

Liam Byrne, who chairs the business select committee, called for the FRC to be given more power in cases like this. 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."