Accounting records have been confiscated at one of Sydney's most well-known brothels as tax investigators launched an audit of the adults-only economy in Australia’s biggest city.

The audit has been undertaken over claims of rampant tax evasion by the adult entertainment industry following a speech made two months ago by deputy tax commissioner, Mark Konza.

The city’s biggest brothels and massage parlours are believed to be the target of investigators.

The Sydney Morning Herald reported that tax investigators entered one well known brothel in the inner city suburby of Surry Hills yesterday and removed the documents.

The brother in question is believed to make about $9.6m (£4m) in revenue a year.