The accounting firm KPMG is under investigation by the sector’s UK regulator over its audit of the 2022 accounts of the gambling company Entain.

The Financial Reporting Council (FRC) said its enforcement division would be examining the conduct of the “big four” accounting firm, without saying what the investigation related to.

“We will cooperate fully with the FRC to conclude this matter as quickly as possible,” a KPMG UK spokesperson said.

Entain, which owns brands including Ladbrokes, Coral and Sportingbet, declined to comment on the investigation.

It also did not comment on whether the investigation into KPMG relates to a settlement it reached with HM Revenue and Customs in 2023 over alleged bribery in a Turkish business it previously owned.

Shares in the company fell by nearly 2% on Monday morning, against a rising FTSE 100, amid uncertainty over what the investigation into KPMG relates to. That fall made Entain the worst-performing stock on the blue-chip index.

In August 2023, the company said it had set aside £585m to cover the cost of the agreement. The figure was included as a liability in its 2023 accounts, although it ended up paying £615m, including a £20m contribution to charity and £10m to cover the costs of HMRC and the Crown Prosecution Service.

HMRC originally launched an investigation in 2019 into “potential corporate offending” by a Turkish-facing online betting and gaming business that Entain owned between 2011 and 2017, as well as the activities of third-party suppliers and former employees of the group.

Entain – formerly known as GVC – was accused of failing to have the correct procedures in place to stop people taking part in bribes that benefit the business.

In December 2023 the company reached a deferred prosecution agreement (DPA) with the CPS.

Under a DPA, a company is charged with a criminal offence but the proceedings are automatically suspended if the DPA receives approval from a judge. They must then adhere to strict rules. DPAs have been used in instances of alleged bribery and corruption with companies including the jet engine maker Rolls-Royce.

Investors are also seeking more than £100m in compensation from Entain, for its alleged failure to update them on issues with bribery and corruption at the Turkish division.

“This legacy matter concerns a business which was sold by a former management team six years ago,” said Barry Gibson, the chair of Entain at the time of the settlement.

“The group has changed immeasurably since these events took place.”