Forensic Accountants Help Monitor Formula 1

Forensic accountants are expected to play a key role in monitoring the newly revised business model of F1.

The sport’s governing body, the FIA, has just announced a budget cap of £40m from 2010. The maximum size of the field will be increased from 20 to 26 cars.

The main intentions of the cap are to ensure that the sport does not lose any more teams, following Honda’s withdrawal in December, and also to attract new teams.

Three teams – USGPE, Lola and Prodrive – have expressed their intention to come into the sport.  At £40m a year the FIA believes that 70 per cent of teams will be able to run at a profit.

Max Mosley, president of the FIA originally wanted to set the level at £30m.  It is also probably that driver salaries will move inside the cap in future seasons.  However the plan still allows for a “two-tier” F1, where teams can opt not to be capped, but will lose technical freedoms enjoyed by the capped teams.

The budget cap system will be policed by a new Costs Commission, which will use auditors and forensic accountants.


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