The Financial Times said the probe into PwC’s audit of Galliford Try comes after the contractor was accused by the regulator of overstating its revenues from the Aberdeen bypass project by £80m in a 2018 interim report.
In March 2019, Kier also revealed it made a £40m accounting error, while using PwC as its auditor.
The mistake saw Kier announce that it was carrying an additional £40m worth of debt, and caused shares in the firm to plummet.
If the FRC finds that PwC failed in its duties, the watchdog has the power to impose fines on the auditor, alongside other penalties.
A senior auditor at another large accounting firm told the Financial Times there had been a “clamp down” by the FRC on construction sector audits, which involve difficult judgments on when companies should book revenues and costs under multiyear contracts.
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