The Financial Reporting Council (FRC) is investigating Deloitte’s auditing of SIG’s accounts for 2015 and 2016.
In February SIG announced its profit had been overstated by around £6.6m over the two years in question.
The FRC, which has delegated the investigation to the Institute of Chartered Accountants in England and Wales (ICAEW), will focus on Deloitte’s auditing of cash and supplier rebates in the company.
A spokeswoman for Deloitte said: “We will co-operate fully with this investigation.
“Quality is integral to our audit work and we are committed to continued improvement in audit quality through investments we’ve been making and programmes we have in place.”
Allegations of false reporting in SIG’s accounts came to light when a whistle-blower made claims about the company’s accounting practices.
This prompted the firm’s auditor Deloitte to carry out a “forensic review” of the company’s accounts with the help of KPMG.
The review found evidence of intentional overstatement in the firm’s accounts.
Last week the FRC slammed the auditing quality of the Big Four accounting firms and singled out KPMG for particular criticism.
KPMG is currently being investigated by the FRC for its auditing of Carillion’s accounts between 2014 and 2017.
SIG declined to comment on the investigation into Deloitte.