The Financial Reporting Council opened a probe into Grant Thornton’s audit of troubled bakery Patisserie Valerie’s accounts today, looking at financial statements between 2015 and 2017.
The FRC also said it is investigating former chief financial officer Chris Marsh’s role in preparing and approving parent company Patisserie Holdings’ financial statements.
Marsh was suspended by the company when it revealed a £40m accounting black hole in October, and later resigned.
He was also arrested by police as the Serious Fraud Office launched its own investigation.
The cake shop was saved when chairman Luke Johnson offered up £20m in two loans, before securing the support of disgruntled shareholders for a £15m fundraising round, part of which was used to pay Johnson back.
The chairman reportedly agreed to give up some of his other 20 directorships to focus on Patisserie Valerie, and will forego his annual £60,000 salary.
Grant Thornton has come under pressure over its connection to the accounting error that led to bakery falling £40m into the red, which is being investigated as potential fraud.
The auditor’s chief executive revealed she would step down at the end of the year last month, with the firm revealing its new boss earlier this week.
Meanwhile, PwC has been drafted in to conduct an audit investigation.
A spokesperson for Grant Thornton said: "I can confirm we have received a letter from the Financial Reporting Council informing us of its decision to commence an investigation, and we will, of course, fully cooperate in this matter."
Patisserie chief executive Paul May resigned with immediate effect last week as the high street chain brought in food industry veteran and turnaround specialist, Stephen Francis, the former chief executive of pork producer Tulip.
“He has a strong track record of restoring value in turnaround situations, especially in the food industry, and the board looks forward to working with him in the revival of the business,” said Johnson.