The Financial Reporting Council has confirmed that it is making inquiries into the accounting at Manchester City, which moves the club's financial problems out of football's own disciplinary system and into the hands of a statutory regulator for the first time.
In a letter to the House of Commons business select committee, the FRC said 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 been opened yet. The distinction matters legally, but it does not change the direction of travel.
Why this is a different kind of problem for City
An independent commission found the club guilty of every charge relating to breaches of the Premier League's financial rules between the 2009-10 and 2017-18 seasons, including artificially inflating its financial position by more than £900m. City are appealing, arguing that the ruling contains "material errors, of law, principle and fact and is unsafe".
The Premier League's process is a private one between a competition and its member clubs. The FRC is not. It has more money, more staff and a wider set of powers, and it normally spends its time on listed public companies rather than football clubs. That is the shift here.
The auditors are now in scope
Two routes are open to the regulator. It can examine the conduct of BDO, the firm that audited City's accounts, and ask whether that audit was carried out in line with the rules. It can also sanction individuals, including club directors or employees, where those people are members of professional accountancy bodies.
BDO is the fifth-largest accounting firm in the UK and describes itself as a market leader in football, advising more Premier League and Championship clubs than any rival. The firm declined to comment. The independent commission found that City had given their auditors a "misleading impression" of the arrangement used to disguise where shareholder money was coming from, and that the auditors were unaware of the scheme.
MPs say the regulator's hands are tied
Liam Byrne, who chairs the business select committee, read the same letter and came away concerned about what the FRC cannot do. He wrote on X that the letter "exposes gaps in its ability to compel evidence from the club and pursue directors who fall outside its disciplinary rules", and said the government should explain why reforms meant to close those gaps were abandoned.
That is the part worth watching. A regulator that cannot compel documents from the organisation it is examining, and cannot reach directors who are not members of an accountancy body, is working with one hand behind its back. Whether the FRC escalates from inquiries to a formal investigation will tell us how much it thinks it can actually achieve.
Case context: An independent commission found Manchester City guilty of all charges relating to Premier League financial rule breaches between 2009-10 and 2017-18, including inflating the club's financial position by more than £900m. City are appealing. The FRC took over regulatory consideration from the ICAEW on 30 September 2026 and has not yet opened a formal investigation.
0 Comments