New development in Man City case as another regulator makes fresh inquiries

The UK audit regulator is making inquiries into alleged accounting irregularities at Man City. Dame Jayne-Anne Gadhia, chair of the Financial Reporting Council [FRC], said in a letter the watchdog was making preliminary enquiries to assess whether there are formal grounds to open an investigation. Man City   were found guilty in September on all charges relating to Premier League financial rule breaches from 2009 to 2018, and have since launched an appeal. City were adjudged to have artificially inflated their revenue by £900million via ‘sham’ contracts. City launched an appeal on October 2, and claim they are backed by a ‘comprehensive body of irrefutable evidence’ . A wide range of sanctions are available , including huge fines, points deductions, and stripping of titles. City auditors under microscope The FRC can look into the conduct of BDO, City’s auditors, to assess whether the audit was in line with the rules. City is not classified as a ‘public interest entity’, a designation given to listed companies, banks and insurers. The responsibility for overseeing the quality of its accounting and audits initially fell to the Institute of Chartered Accountants in England and Wales. The FRC can apply sanctions if it finds any evidence of wrongdoing. It can also apply sanctions to individuals such as directors or employees of the club, if they are members of professional accountancy bodies. BDO advises a number of Premier League and Championship clubs on their accounts, and is the fifth-largest accountancy firm in the UK. Two of BDO’s most senior partners led its audits of City. Liam Byrne, chair of the business select committee, called for greater powers for the FRC to look into similar cases. 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.”