Deloitte Probe On Nortel Financials Seen

A Big Four accounting firm is feeling the further bite of the Nortel accounting scandal.

New York-based Deloitte & Touche LLP, Canada's biggest accounting firm, is being investigated by the governing body for Ontario's accounting industry over Nortel Networks Corp.'s financial statements, Toronto’s National Post reported.

The Institute of Chartered Accountants of Ontario began a formal investigation after monitoring the situation for several months, anonymous sources told Reuters.

On the record, officials are keeping a lower profile. Peter Varley, a spokesman for the accounting institute, declined comment on whether a formal probe is under way, saying such disclosure would interfere with due process, the Post said.

Further, the paper reported that Deloitte representative Jacqui d'Eon said the accounting firm wasn't aware of an investigation by the institute. Deloitte hasn't been contacted by the body over Nortel since receiving a letter several months ago, she said.

The Brampton, Ontario-based company's accounting also is being investigated by Canadian and U.S. securities regulators. Nortel said Monday that its statements are the subject of a Canadian criminal probe by the Royal Canadian Mounted Police's Integrated Market Enforcement Team.

The criminal probe follows months of informal review of the company by the RCMP.