The watchdog said on Wednesday it will examine the audit of the café chain’s financial statements for the years 2015, 2016 and 2017.
Patisserie Valerie revealed “significant, and potentially fraudulent” accounting irregularities last month.
The FRC said it will also investigate Patisseries’ former chief financial officer Chris Marsh’s preparation and approval of Patisserie’s statements under the Accountancy Scheme.
Marsh was suspended from his role shortly after the company discovered the irregularities. He was then arrested by the police, but was shortly after released on bail.
The company has since found two secret overdraft facilities set up with Barclays and HSBC, through which £9.7m had already been spent.
The FRC investigation follows a separate probe from the Serious Fraud Office. The Business, Energy and Industrial Strategy committee could also summon the accountancy firm and the café chain. Chair Rachel Reeves told This is Money last month that Grant Thornton also had “serious questions to answer”.
A spokesperson for Grant Thornton said, "I can confirm we have received a letter from the [FRC] informing us of its decision to commence an investigation, and we will, of course, fully cooperate in this matter."
Last week, Patisserie announced that its CEO Paul May has resigned with immediate effect. It then appointed turnaround specialist Stephen Francis as its new CEO. Francis was previously the CEO of Tulip, a pork farmer and producer, and has also worked at Barclays, PwC and McKinsey.