The probe centres on the London rugby club incorrectly treating a £1.1m capital contribution from its chairman Derek Richardson as revenue in 2017, as first reported by the Financial Times.
This overstatement meant that Wasps Holdings breached covenants on £35m of retail bonds and led to the resignation of its auditors, Big Four firm PwC.
The investigation is also set to look at how the club reacted to rectify the matter.
In a trading statement in 2017, Wasps Holdings was forced to reduce its consolidated EBITDA for the year ended 30 June 2017 from £3.5m to £2.4m after PwC discovered the material overstatement.
“Due to the timing of receipt, the board of directors of Wasps Holdings and its auditors have also concluded that the cash contribution should be accounted for as a capital contribution made in the financial year ending 30 June 2018,” it said in its 2017 annual report.
Following the discovery of the overstatement, PwC tendered its resignation.
In a listing on Companies House, the firm said that it was resigning because “as set out in our audit report on the statements of Wasps holdings Limited for the Year ended 30 June 2017, during the course of our audit we were provided with evidence which our testing revealed to have been falsified.
“Given the seriousness of these events, following completion of our audit we do not consider it appropriate that we continue as auditors,” it added.
In its 2018 annual report Wasps Holdings noted that a financial review carried out that year “highlighted that a number of items held on the balance sheet could not be substantiated and the move onto the new accounting system at the end of 2016 resulted in various transactions being recognised in the old system after the statutory accounts had been finalised”.
The FCA and PwC declined to comment. Wasps have been contacted for comment.