The UK audit regulator has confirmed it is leading inquiries into accounting irregularities at Manchester City.
The Financial Reporting Council took over "regulatory consideration" of the case from the Institute of Chartered Accountants in England and Wales on 30 September. No formal investigation has started, but the FRC is making inquiries into the matter.
Background to the inquiry
The inquiry follows Manchester City being found guilty by an independent commission of all charges relating to breaches of the Premier League's financial regulations between the 2009-10 and 2017-18 seasons. The club was found to have artificially inflated its financial position by more than £900m. Manchester City are appealing the verdict.
The independent commission found that the club gave a "misleading impression" of the scheme used to disguise the origin of shareholder funds injected into the club to its auditors, who were "unaware" of the scheme.
FRC's powers and scope
The FRC has greater resources and powers than the previous regulator, and can apply sanctions if it finds evidence of violations. It routinely oversees accounting standards at larger institutions such as listed public companies, though it does not typically examine football clubs.
The FRC can investigate the conduct of BDO, Manchester City's auditors, to determine whether the audit complied with regulatory rules. It can also apply sanctions to individuals such as directors or employees of the club if they are members of professional accountancy bodies.
BDO is the UK's fifth-biggest accounting firm and claims to be a market leader in football, advising more Premier League and Championship clubs than any other firm.
Calls for stronger regulation
Liam Byrne, chair of the business select committee, called for greater powers for the FRC to investigate similar cases. He said the regulator's letter exposes gaps in its ability to compel evidence from the club and pursue directors who fall outside its disciplinary rules.
Byrne wrote that this "raises serious questions about the powers available to hold companies and directors to account" and called on the government to explain why reforms to close these gaps were abandoned and what will now be done to strengthen accountability.
Manchester City have said they will appeal against the commission's decision, arguing that it contains "material errors, of law, principle and fact and is unsafe".