The regulator has also said that it is no longer investigating some ICAEW members at PwC, but that its investigation into certain other members of the accountancy bodies is ongoing. The FRC confirmed that 'we're still investigating other "accountancy bodies", including other members of the firm'.

The FRC’s investigation was originally announced at the end of 2014 and followed on from the discovery of a £263m black hole in the grocery retailer’s interim report earlier in the year, which Tesco said was caused by booking revenue from suppliers too early.

In a statement PwC said: 'We cooperated fully during the FRC's thorough investigation and are pleased that the FRC has closed it without any further action.'

At the time the accounting misstatement was announced, the most recent 2013/14 annual report and accounts included warnings from PwC in the auditor's report which said that it had particularly considered areas in which the directors made subjective judgments. ‘For example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain.

‘As in all of our audits, we [PwC] also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud,’ PwC said.

At the time, the scope of the investigation was said to be the conduct of members and PwC in relation to the preparation, approval and audit of the financial statements of Tesco plc for the financial years ended 25 February 2012, 23 February 2013 and 22 February 2014 and the preparation, approval and review of financial information relating to the 26 weeks ended 23 August 2014 leading to the publication of the company’s interim results on 23 October 2014.

PwC has been Tesco’s external auditor for more than three decades. According to the company's 2014 annual report, PwC was paid £5.5m for audit and audit-related services during the year, plus an additional £4.1m for non-audit work, making a total of £10.2m.

In April this year, Tesco agreed a deferred prosecution agreement (DPA) with the Serious Fraud Office (SFO), which had launched a criminal investigation into the accounting irregularities.

Under the terms of the deal the retailer paid the SFO a £129m fine and agreed to pay £85m for the expected costs of an FCA compensation scheme.

At the time, the SFO made clear that the DPA only relates to the potential criminal liability of Tesco Stores Ltd and does not address whether liability of any sort attaches to Tesco plc or any employee, agent, former employee or former agent of Tesco or Tesco Stores Ltd.

Three former Tesco executives, including former finance director Carl Rogberg, are to appear at Southwark Crown Court on 4 September to face fraud charges in relation to the retailer’s accounting problems.