The industry disciplinary body has decided to launch an investigation into the conduct of individuals involved in the events leading up to the collapse last year of European Home Retail and Farepak Food & Gifts.

The Accountancy Investigation and Disciplinary Board took the decision to begin the investigation following a consultation with the Institute of Chartered Accountants of England & Wales as well as the Chartered Institute of Management Accountants.

The AIDB announced today that it will investigate the conduct of members of accountancy bodies involved in preparing Farepak's accounts for the fiscal year ending 30 April 2005.

The announcement did not say which parties would be specifically investigated. Farepak was audited by Ernst & Young but its office-holders with accountancy qualifications could also be looked at by the body.

An E&Y spokesman said: 'Ernst & Young can confirm that neither the firm nor members of the firm have had any communication from the AIDB on this matter.'

The AIDB will also look into the conduct of individuals in relation to circumstances lading up to the collapse of European Home Retail Plc.

Further reading:

Xmas savers' funds ringfenced after Farepak collapse

BDO and DTI to investigate Farepak collapse

Farepak loans 'nothing to do with audit'