UK audit regulator examines Manchester City accounts without opening formal investigation

The Financial Reporting Council is examining Manchester City's financial statements and the work of auditor BDO, but has not opened a formal investigation. Bloomberg Tax reported on Tuesday that the UK watchdog is reviewing the published findings of the Premier League tribunal, according to a letter from FRC chair Jayne-Anne Gadhia to Parliament's business committee.

Watch the highlights:

The correspondence is dated 14 October and was published by Parliament on 20 October. It is listed under the Business, Innovation, Science and Trade Committee, with its stated subject covering both Manchester City Football Club and the lessons the case may hold for audit reform.

The scrutiny follows an independent commission's findings against City over breaches of Premier League financial regulations between the 2009-10 and 2017-18 seasons. According to the BBC, those findings included artificially inflating the club's financial position by more than £900m. City are appealing, maintaining that the commission's decision contains errors of law, principle and fact and should not stand.

The BBC reported that the regulator can examine whether BDO's audit complied with the rules and can sanction club directors or employees who belong to professional accountancy bodies. The commission found that City's auditors were unaware of the arrangement used to conceal the source of shareholder funding. BDO declined to comment to the BBC.

Committee chair Liam Byrne called for stronger regulatory powers, citing limits on compelling evidence from the club and pursuing directors outside the regulator's disciplinary remit. In comments reported by the BBC, he also asked the government to explain why reforms intended to address those gaps had been abandoned and how accountability would be strengthened.

The immediate question is whether the published football tribunal findings provide grounds for a separate formal regulatory investigation. MLex reported that the FRC's letter described precisely that assessment, while acknowledging limits on its powers. The review of City's statements and BDO's audits therefore remains at a preliminary stage; it is not an announced finding of misconduct by the auditor.