The UK’s Financial Reporting Council (FRC) has launched an investigation into global audit firm KPMG for its audit of HBOS, the bank, for the year ending 2007.

A statement from the FRC said: “This investigation has been instituted by the FRC’s Conduct Committee following the completion of the Executive Counsel’s preliminary enquiries announced on 21 January 2016.”

The ombudsman said the inquiry comes in relation to KPMG’s use of the “going concern” assumption in preparation of financial statements for the year under review, and will ask whether the firm considered “material uncertainties” that should have been disclosed in the financial statements.

KPMG issued a response to the FRC statement calling on the regulator to complete its work “as quickly as possible” given that it is eight years since the financial crisis and events at HBOS had already been considered by the FRC, the Prudential Regulation Authority and the Financial Conduct Authority.

“Throughout it has been our position that our audits of HBOS were performed to the appropriate prevailing standards. We are confident that our work will stand up to objective scrutiny,” said KPMG.

“HBOS reported pre-tax profits of £5.5bn in its 2007 financial statements and continued to raise capital in the wholesale markets well into 2008. Banking analysts continued until August 2008 to expect that it would be profitable in that year.

“With hindsight, market conditions all changed with the failure of Lehman in September 2008 and the effective closure of the wholesale funding markets.”