The Financial Reporting Council (FRC) is conducting preliminary inquiries into the conduct of auditors and accountants associated with Manchester City amid revelations of financial misconduct at the football club. While the regulator has not yet initiated a formal investigation into BDO, the club’s long-standing audit firm, it retains the authority to do so if warranted.

The Premier League recently concluded that Manchester City artificially inflated its revenues by approximately £900 million between 2010 and 2018. This was reportedly achieved through the use of funds from its parent company, Abu Dhabi United Group, to exaggerate the value of sponsorship agreements. An independent commission found that the club submitted misstated accounts and concealed its true financial status from auditors and football authorities. Manchester City has consistently denied any wrongdoing.

Although BDO may have been misled, experts suggest the audit firm could still face disciplinary action, as regulators seek to determine whether it applied adequate professional skepticism during the audits. Industry insiders anticipate that the FRC will also scrutinize the club’s senior finance officials to assess if they are liable, particularly those who are members of the Institute of Chartered Accountants in England and Wales (ICAEW) or other relevant bodies.

Manchester City is not classified as a public interest entity, so ordinarily, any audit discrepancies would fall under the ICAEW’s jurisdiction rather than the FRC’s. However, in exceptional situations, the FRC can assume control, and sources indicate this may be the case here.

Both the FRC and BDO declined to comment on the matter, citing confidentiality. Manchester City was also contacted for a response.

The ongoing scrutiny highlights regulatory concerns about the auditing practices surrounding high-profile sports organizations and the responsibilities of auditors in verifying complex financial arrangements.