FRC Takes Charge of Manchester City Accounting Investigation

The Financial Reporting Council (FRC) has confirmed it is now in charge of looking into accounting issues at Manchester City.

According to a report by the BBC on Tuesday, the FRC sent a letter to the House of Commons Business, Culture, Energy and Sport Committee. They said they took over the case from the Institute of Chartered Accountants in England and Wales on 30 September. No formal investigation has started yet, but the FRC is asking questions.

This move comes after an independent commission found that Manchester City broke Premier League financial rules from the 2009-10 season to the 2017-18 season.

The commission stated that the club made its financial situation look better by over £900 million. Manchester City is appealing this decision, saying it has "material errors of law, principle and fact and is unsafe."

The FRC has more power and resources than the previous organization. They can check if BDO, Manchester City’s auditors, followed the correct rules during their audits. They can also punish individuals, like directors or staff who belong to professional accountancy groups.

The independent commission said the club created a "misleading impression" about a scheme to hide where shareholder funds came from, which left the auditors "unaware" of the truth.

BDO is the fifth-largest accounting firm in the UK and is a key player in football auditing. They have worked with more Premier League and Championship clubs than any other firm.

Liam Byrne, who chairs the business select committee, pointed out weaknesses in the FRC’s powers.

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."

He added, "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."