The firm has also been given a severe reprimand, and audit partner John Clennett has been fined £150,000 and given a severe reprimand in relation to three allegations, all of which were proved at the disciplinary tribunal.

These concerned the appropriateness of the accounting and disclosure in Aero's 2006 financial statements of the ‘Garuda transaction’ (relating to a deal with an Indonesian company); the costs of sales and stock valuations in the 2006, 2007 and 2008 audits; and stock existence in the 2007 and 2008 audits.

The tribunal found that the conduct of Deloitte and Clennett fell significantly short of the standards reasonably to be expected of a member firm and an ICAEW member, respectively.

Deloitte was ordered to pay all the costs of the proceedings brought against it and Clennett and the FRC ordered an interim payment on account of costs of £2.275m Gareth Rees executive counsel to the FRC, said: ‘This fine of £4m is the highest recorded by the FRC for misconduct on a firm and was imposed on Deloitte by the tribunal following a five week hearing.

‘It is a clear indication of the importance of the highest standards being maintained in all audits and the seriousness of the failure to perform an adequate audit of these financial statements which led to misleading information about the profits and turnover of the company being made to the market.’

The disciplinary tribunal is the outcome of an investigation launched by the FRC’s accountancy and actuarial discipline board in early 2011.

Hugh Bevan, the former finance director of Aero Inventory, faced an FRC disciplinary tribunal in July 2015 which found his conduct fell significantly short of the standards reasonably to be expected in relation to a number of accounting issues.

These included Bevan’s reporting of the so-called ‘Garuda Transaction’, involving an agreement purportedly reached on 29 June 2006 by which Aero purchased an aircraft parts inventory from PT Garuda Indonesia, the flag carrier of Indonesia, for a purchase price of $34m (£27m) and an agreement purportedly reached on 29 June 2006 by which Aero immediately re-sold to GMF AeroAsia for a purchase price $23m (£18m) some of the inventory which Aero had acquired from Garuda. GMF was a 99% owned subsidiary of Garuda.

Under the settlement agreed with the FRC, Bevan was excluded from the profession for three years and required to pay £170,000 in costs.

A Deloitte spokesperson said: 'We accept the findings of the Tribunal and regret that in this instance our audit did not meet professional standards. Our audit quality processes have evolved significantly since these audits were performed between 2006 and 2008, and we are relentless in our focus to ensure all our audits are of the highest quality.'