The Financial Reporting Council (FRC) has closed its investigation into the accountancy firm BDO’s auditing of healthcare staffing firm Healthcare Locums (HCL), reports The Telegraph.

The staffing company sparked controversy several years ago when it revealed severe accounting irregularities and sacked its founder, Kate Bleasdale.

The FRC concluded that “there is not a realistic prospect” that a tribunal would make an adverse finding against the auditor regarding the issues examined within the investigation.

The accounting watchdog opened its probe in 2011 after HCL’s directors admitted at the annual meeting that the company would have to restate its financial accounts going back to 2008.

In January 2011, the staffing firm halted trading of its shares, issued a profit warning, and suspended its founder Kate Bleasdale and finance director Diane Jarvis after discovering "serious accounting irregularities".

Ms Bleasdale was later dismissed. Ms Jarvis resigned with immediate effect a few weeks later, which the company said followed "an investigation by the company into financial irregularities that occurred during her tenure as chief financial officer and for which she has accepted responsibility".

Healthcare Locums had already adjusted its accounts in March 2010 for the previous financial year, during which the company paid £6.7 million to acquire Redwood Health, a company that belonged to Ms Bleasdale’s husband, John Cariss.

Ms Bleasdale founded HCL in 2003, a year after winning a £2.2 million high profile sexual harassment case against Match Group, another healthcare recruitment firm she founded.

She was declared bankrupt earlier this month following a six-year employment dispute with a former business partner, Debbie Forster, who worked with Ms Bleasdale on a start-up called Stayput Solutions.

HCL was delisted from London’s AIM stock exchange in 2013, when it was acquired by its former shareholders Toscafund and Ares Capital Europe.

BDO said: "We are pleased that the FRC decided to discontinue its investigation. We co-operated fully throughout and we are happy with the outcome."