PL charge City for alleged breaches of financial rules

[ChicagoBlue]

No were not operated like that, but it's fundamental to the never ending smear campaign that lies like that are repeated...

the reality is somewhat different...

e.g. From the MCFC Annual Report (2010-2011) [1], the Auditors BDO [2] stated this :-

"Opinion on financial statements

In our opinion the financial statements:

Give a true and fair view of the state of the Group’s and the Company’s affairs as at 31 May 2011 and of the Group’s loss for the year then ended;
Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
Have been prepared in accordance with the requirements of the Companies Act 2006."

So the PL are implicitly accusing BDO (world renowned auditors) of being either incompetent or complicit in false accounting. In addition they are implicitly accusing Etihad Airways accountants (KPMG and Deloitte) of being either incompetent or complicit in false accounting.

I don’t think that is what the auditors are saying, or that their audit implies.

They track accounts and ensure accounting rules have been followed. The auditors would never know where any Euro comes from if ADUG was trying to hide it.

Audits uncover accounting errors and omissions, not that the money came from where ADUG said it came…if the numbers add up and the accounts all agree!

 

[halfcenturyup]

I don’t think that is what the auditors are saying, or that their audit implies.

They track accounts and ensure accounting rules have been followed. The auditors would never know where any Euro comes from if ADUG was trying to hide it.

Audits uncover accounting errors and omissions, not that the money came from where ADUG said it came…if the numbers add up and the accounts all agree!

In the normal course of an audit yes. But an important point:

When matters come to light like the DS leaks, and a governing body finds the club guilty of, basically, fraud and misleading auditors, you can be sure the auditors would subsequently have followed up with management and increased the severity of their audit procedures. They would also certainly have received very specific confirmations from management and board that they have properly disclosed everything relevant in connection with UEFA's findings and, now, the PL allegations. Why? Because if the club had committed fraud and deceived the auditors, the auditors could fall back on their audit procedures as a defence. After the leaks and the UEFA charges, though, that would be no defence for the auditors. They would also be at heightened risk and, potentially, part of a criminal conspiracy..

That they still have given the accounts an unqualified opinion since 2018 means the auditors have satisfied themselves that the alleged matters are properly reflected in the accounts. Or, at least, they are satisfied to the extent that the allegations don't affect the true and fair view given by the accounts. Which, after all, is at the heart of the most serious allegations from the PL. If the Pl can't prove the accounts don't give a true and fair view, all that is left is some non-disclosures to the PL.

 

[Plays By Sense Of Smell]

No were not operated like that, but it's fundamental to the never ending smear campaign that lies like that are repeated...

the reality is somewhat different...

e.g. From the MCFC Annual Report (2010-2011) [1], the Auditors BDO [2] stated this :-

"Opinion on financial statements

In our opinion the financial statements:

Give a true and fair view of the state of the Group’s and the Company’s affairs as at 31 May 2011 and of the Group’s loss for the year then ended;
Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
Have been prepared in accordance with the requirements of the Companies Act 2006."

So the PL are implicitly accusing BDO (world renowed auditors) of being either incompetent or complicit in false accounting. In addition they are implicitly accusing Etihad Airways accountants (KPMG and Deloitte) of being either incompetent or complicit in false accounting.

Refs

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So of course, if it comes down to the balance of probabilities...simple Accounting principles would carry a hell of lot of weight here.

The possibility of one firm being wrong/dodgy in their operations?
Already very low, but a possibility as we have very occasionally seen.

Two? (There's a reason for the 'two sets of eyes' principle)
So ridiculously low as to be relied on as one of the foundations of GAAP themselves.

PL are pissing in the wind

 

[ChicagoBlue]

In the normal course of an audit yes. But an important point:

When matters come to light like the DS leaks, and a governing body finds the club guilty of, basically, fraud and misleading auditors, you can be sure the auditors would subsequently have followed up with management and increased the severity of their audit procedures. They would also certainly have received very specific confirmations from management and board that they have properly disclosed everything relevant in connection with UEFA's findings and, now, the PL allegations. Why? Because if the club had committed fraud and deceived the auditors, the auditors could fall back on their audit procedures as a defence. After the leaks and the UEFA charges, though, that would be no defence for the auditors. They would also be at heightened risk and, potentially, part of a criminal conspiracy..

That they still have given the accounts an unqualified opinion since 2018 means the auditors have satisfied themselves that the alleged matters are properly reflected in the accounts. Or, at least, they are satisfied to the extent that the allegations don't affect the true and fair view given by the accounts. Which, after all, is at the heart of the most serious allegations from the PL. If the Pl can't prove the accounts don't give a true and fair view, all that is left is some non-disclosures to the PL.

To a degree, I agree, but if the supposed fraud took place it would be in valuations that the auditor would accept at face value.

With the PL questioning some of those, the auditors would merely be assuring the monies were correctly accounted for, not their size.

Regardless, it’s all BS and there’s no chance City will get nailed for it!

 

[halfcenturyup]

To a degree, I agree, but if the supposed fraud took place it would be in valuations that the auditor would accept at face value.

With the PL questioning some of those, the auditors would merely be assuring the monies were correctly accounted for, not their size.

Regardless, it’s all BS and there’s no chance City will get nailed for it!

Without wishing to argue the point, not a chance. The auditor has two jobs. First, to make sure that, in their opinion, the accounts give a true and fair view. Second, to cover their arses so they don't get sued to kingdom come if their opinion turns out to be wrong. Not necessarily in that order.

As soon as the leaks came out, they would have been on the phone. And the very next audit would have been strengthened to make sure that, in their, opinion, notwithstanding the allegations, the accounts gave a true and fair view. They would absolutely have looked at the sourcing of the funds to pay the sponsorship, even if it was just accepting a specific and detailed confirmation from the management/board/owner. Clearly, in their view, whatever they did gave them enough comfort to continue giving unqualified audit reports. If they weren't satisfied, they would have qualified the accounts or, more likely, resigned as auditors.

Trust me on this one.

 

[blue b4 the moon]

Layman question and one that I'm sure will have been asked and answered.
If the PL amateur panel punish us - I know there's no appeal process - well, none worthy of the name, - but if we are absolutely adamant they are wrong and the finding is unjust and without evidence - can we sue for defamation and reputational damage that such a finding and the months of conjecture will have caused? In effect we take it into a legal sphere.

I posted this a few pages back, Newport & a couple of other clubs appealed in 'proper' courts against the Welsh FA under restraint of trade and won.

Now this wasn't centered around financial matters however, they took what I assume are a organisation with their own self governing rules to court and had the verdict over turned.

FAW loses court case

The High Court in London yesterday ruled in favour of three non- League clubs - Newport AFC, Caernarfon Town and Colwyn Bay- in their challenge to the Football Association of Wales, writes Rupert Metcalf.

www.independent.co.uk

 

[Centurions]

Tried having this conversation with a rag the other day. He was giving it the big one.

I asked him "go on then what have we apparently commited"

He spouted off "fraud, disguised sponsorships, back handers" etc...

I then said "why haven't the authorities like Inland revenue, Police and other government officials been notified if it's as serious as what you are saying"?

His response "its got nowt do with them" ..

I walked off shaking my head.

Next time tell him to report us to the nearest copper :)

 

[Centurions]

So effectively as I've mentioned a few times these Three people alone can ruin a £5 Billion company. Seems hard to believe if true.

Out of interest, how many people do you think would be a suitable number to ruin a £5billion company?

 

[BlueMonkey79]

So effectively as I've mentioned a few times these Three people alone can ruin a £5 Billion company. Seems hard to believe if true.

The Glazers have managed it!

 

[ganganvince]

There is an appeal process but still a panel within PL structure...

AFAIK we cannot appeal to CAS like vs UEFA.

And an opportunity to go to the UK courts after that in very limited circumstances.