PL charge City for alleged breaches of financial rules

[Moss Side's Finest]

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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Great post mate

 

[mancboy]

I lived plenty of crazy scenes as an auditor, but the idea auditors just look at what is put in front of them is ludicrous.

assuming that is the same as assuming the police say well he said he hasnt done it so we'll just leave it there

 

[Stoned Rose]

No they are not.

Auditors only review what is put infront of them.

Not this bell again ffs.

 

[Stoned Rose]

I lived plenty of crazy scenes as an auditor, but the idea auditors just look at what is put in front of them is ludicrous.

Crazy scenes mate? Do tell……

 

[JewelZee]

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.

Facts...

 

[mancboy]

No they are not.

Auditors only review what is put infront of them.

if this was actually the case, we could all be auditors as all it would require is a note from the company saying we are all good nothing to see here and the audit would be done

 

[Gordyola]

No they are not.

Auditors only review what is put infront of them.

They arent no but a negative verdict could reflect badly on the auditors

If you think they just look at what is "put in front" of them then you clearly don't have a clue as to what they do and are responsible for

Here are just a part of their duty

Part extract from

https://www.legislation.gov.uk/ukpg...heading/duties-and-rights-of-auditors/enacted

Duties of auditor​

(1)A company’s auditor, in preparing his report, must carry out such investigations as will enable him to form an opinion as to—

(a)whether adequate accounting records have been kept by the company and returns adequate for their audit have been received from branches not visited by him, and

(b)whether the company’s individual accounts are in agreement with the accounting records and returns, and

(c)in the case of a quoted company, whether the auditable part of the company’s directors' remuneration report is in agreement with the accounting records and returns.

(2)If the auditor is of the opinion—

(a)that adequate accounting records have not been kept, or that returns adequate for their audit have not been received from branches not visited by him, or

(b)that the company’s individual accounts are not in agreement with the accounting records and returns, or

(c)in the case of a quoted company, that the auditable part of its directors' remuneration report is not in agreement with the accounting records and returns,

the auditor shall state that fact in his report.

(3)If the auditor fails to obtain all the information and explanations which, to the best of his knowledge and belief, are necessary for the purposes of his audit, he shall state that fact in his report.

(4)If—

(a)the requirements of regulations under section 412 (disclosure of directors' benefits: remuneration, pensions and compensation for loss of office) are not complied with in the annual accounts, or

(b)in the case of a quoted company, the requirements of regulations under section 421 as to information forming the auditable part of the directors' remuneration report are not complied with in that report,

the auditor must include in his report, so far as he is reasonably able to do so, a statement giving the required particulars.

(5)If the directors of the company have prepared accounts and reports in accordance with the small companies regime and in the auditor’s opinion they were not entitled so to do, the auditor shall state that fact in his report.

 

[halfcenturyup]

assuming that is the same as assuming the police say well he said he hasnt done it so we'll just leave it there

Exactly this. That said, there are ways to manipulate auditors and justify certain accounting treatments that, maybe, could be questionable. Back in the day the French/Swiss group I was working for had a pretty unknown French audit company that the holding company had used for generations. We were their only big account. They didn't want to lose us and so were happy to accept some of our more "creative" accounting. As the group grew we needed an international firm to audit the overseas subsidiaries so C&L, my old employer, were brought in as joint auditors. But they were kept well away from the more "sensitive" areas. At the end of the day, auditing is based on risk assessment: the higher the risk, the more evidence is required and the more severe the audit tests. We always pushed the limits, but never went over them (well, not much, anyway). We had great fun playing them off against each other, though :)

Long story, but my point was this: auditing is based on risk analysis and being investigated by governing bodies and, in the case of UEFA, being found guilty, raises the risk a hundredfold. There is no way the auditors are just accepting what is put in front of them in that situation. They will want to know what is going on and how it affects the true and fair view given. If they aren't convinced by the explanations and information provided by the management/board and they feel the issue affects the true and fair view given by the accounts then they qualify their opinion or resign. True of C&L in our case if they didn't like our creative accounting and felt it impacted on the view given by the accounts, and true of BDO in City's case.

Clearly, BDO think there either is nothing in these allegations, or that there is something in them but they don't change their view on the true and fair view given by the accounts.

 

[Iassel]

Ah, the old adage about auditors. Treat them like mushrooms ....

Having spent a depressingly long time both being a Deloitte auditor and now being an auditee in my life, in this specific case it’s clear there is no finger being pointed at BDO.

The PLs underlying accusation is ultimately that some of the contracts City hold/held were only functional on paper and were just a vehicle for SM to pump equity money in.

BDO will have been presented a signed contract and seen funds coming into the bank and moved on. They may have even asked City the route of funds (unlikely) which as was seen at CAS there was a perfectly reasonable explanation for, so BDO not flagging any concerns doesn’t infer anything about them.

 

[Gorton_Tubster]

It would be a minimum of 6 people - if City appealed, a new panel would be formed to hear that appeal.

Whether it’s 6,3 or even 1 is irrelevant though - these are serious people forming the panel and are not going to find in the PLs favour unless they prevent something explosive that City can’t defend.

But even if we examine the reality of a kangaroo court as people constantly panic about, say that what City put up is truly incontrovertible and the panel finds against the club anyway - off the record, City would be fucking delighted as it’s basically the only route outside of the PL environment to an external court which is where the club have always argued this should be handled.

Makes sense. But do you have proof or evidence of our owners saying that?