The UK’s Financial Reporting Council (FRC) has taken over preliminary inquiries into Manchester City’s financial accounts and the work of its auditor, BDO, following findings that the Premier League club breached financial regulations.

According to a report by the Financial Times, the FRC confirmed in a letter to the UK Parliament’s Business, Innovation and Science Committee that it assumed responsibility for the regulatory consideration of the case from the Institute of Chartered Accountants in England and Wales (ICAEW) on September 30.

The regulator is examining whether the findings of the Premier League’s disciplinary commission provide grounds for a formal investigation. The inquiries do not mean that a separate formal investigation has been opened or that the club’s auditors have been found guilty of professional misconduct.

The development follows a September 29 ruling by an independent Premier League commission that found Manchester City guilty of serious breaches of the league’s financial rules over nine seasons, from 2009/10 to 2017/18. The commission found that the club used commercial arrangements that misrepresented the true nature of agreements and filed misstated accounts.

The commission’s findings included allegations that the club artificially inflated revenue and concealed the true state of its finances from auditors and football regulators.

Manchester City has disputed the ruling and lodged an appeal, arguing that the commission’s opinion contains material errors of law, principle and fact.

The FRC’s inquiries will examine whether the club’s financial statements and BDO’s audits complied with relevant requirements. The regulator may take action against accountancy firms or individuals who fall within its disciplinary jurisdiction if grounds for such action are established.

However, the FRC has highlighted limitations in its current powers, including restrictions on compelling information from entities that are not classified as public interest entities and on pursuing directors who are not members of professional accountancy bodies.

Dame Jayne-Anne Gadhia, the FRC’s chair, has called for reforms to strengthen the regulator’s ability to gather evidence and enforce accounting standards.

Liam Byrne, chair of the parliamentary committee, has also questioned the limits of the regulator’s powers and called on the government to explain how accountability gaps will be addressed.

The FRC’s inquiries are separate from Manchester City’s appeal against the Premier League ruling. The outcome of the appeal and any potential regulatory action remain pending.