The Financial Reporting Council (FRC) said its investigation would probe an audit conducted by accountancy firm Macintyre Hudson (MHA) of the consolidated financial statements of ISG Limited, for the year ended 31 December 2022.

The decision came at a meeting of the FRC鈥檚 Conduct Committee on 21 January this year.

ISG held more than 拢1 billion worth of government contracts when it fell into administration, and 2,200 workers were made redundant. The company, whose debts had spiralled to over 拢1 billion, was the target of a take-over by a holding company fronted by South African businessman Andre Redinger. But ISG鈥檚 US owner Cathexis ultimately rejected the offer just prior to ISG鈥檚 collapse.

The company did not file its 2023 accounts but had been on course to make a post-tax loss of 拢133 million, from a turnover of 拢2.2 billion.

At the time of its collapse, the company blamed a series of large, loss-making contracts secured between 2018 and 2020 that saddled the business with liquidity problems that ultimately it was unable to trade its way out of.

A spokesperson for MHA said: 鈥淢HA is committed to audit quality and we will be co-operating fully with the FRC as part of this investigation.鈥�