The Financial Reporting Council has confirmed it is leading inquiries into accounting irregularities at Manchester City.
As reported by the BBC on Tuesday, in a letter to the House of Commons Business, Culture, Energy and Sport Committee, the FRC stated it took over “regulatory consideration” of the case from the Institute of Chartered Accountants in England and Wales on 30 September. No formal investigation has begun, but the regulator is making inquiries.
The move follows an independent commission’s finding that Manchester City were guilty of all charges relating to breaches of Premier League financial regulations between the 2009-10 and 2017-18 seasons.
The commission concluded the club artificially inflated its financial position by more than £900 million. City are appealing the verdict, describing it as containing “material errors of law, principle and fact and is unsafe.”
The FRC has greater resources and powers than the previous body and can examine whether BDO, Manchester City’s auditors, conducted the audits in line with the rules. It can also apply sanctions to individuals, such as directors or employees who are members of professional accountancy bodies.
The independent commission found that the club gave a “misleading impression” of a scheme used to disguise the origin of shareholder funds, leaving the auditors “unaware” of it.
BDO, the UK’s fifth-biggest accounting firm and a major player in football auditing, advised more Premier League and Championship clubs than any other firm.
Liam Byrne, chair of the business select committee, highlighted gaps in the FRC’s powers.
In a post on X, he wrote: “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.”
Source: punchng.com
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