The council, which regulates the accounting industry, said it would be investigating accounts signed off by King and King for four Liberty Steel businesses.
This includes Alvance British Aluminium Limited, previously called Liberty Aluminium Lochaber Ltd, which was the company formed when GFG Alliance bought the smelter in Lochaber.
Companies House states the smelter’s accounts for 2020 are now more than a year overdue.
Offices of Liberty Steel, including those in Scotland, faced visits from Serious Fraud Office (SFO) investigators last week as part of a probe into suspected fraud and money laundering by parent firm GFG Alliance.
Critics have said questions are “piling up” for the Scottish Government due to the smelter receiving a guarantee from ministers to purchase power from the nearby hydro-plant, owned by Mr Gupta’s father, worth £586 million over 25 years.
This deal has come under renewed scrutiny following the collapse of Greensill Capital, GFG Alliance’s main funder.
The Scottish Government has maintained there has never been a call on the guarantee, and claim the smelter and the wider securities are worth more than £430m.
This would be well over the remaining exposure to the guarantee of £284m, but documents obtained by The Scotsman put the value of the security at £162m.
The FRC said it would be combing through accounts relating to Liberty Speciality Steels Limited, Alvance British Aluminium Limited (formerly Liberty Aluminium Lochaber Ltd) and Liberty Steel Newport Limited for the year ending March 31, 2019.
It will also look at Liberty Performance Steels Limited statements for the year ended March 31, 2020.
Mr Gupta was once lauded as the “saviour of steel” for rescuing factories, but has come under heavy scrutiny amid accusations of potentially fraudulent trading after his main lender, Greensill Capital, collapsed a year ago.
Scottish Labour’s finance spokesperson Daniel Johnson said ministers must “come clean” over the deal”.
He said: “Ministers cannot keep burying their heads in the sand while the picture surrounding Liberty Steel gets more alarming by the day.
“Questions are piling up around the SNP’s dodgy deal with this company, which has put hundreds of millions of taxpayer pounds on the line.”
Willie Rennie, the Liberal Democrat MSP, said it was time for ministers to “spell out” what engagement the Government had with the accountants.
He said: “The Scottish Government need to spell out what engagement they had with these accountants and whether their reports were used to underpin a deal that has put hundreds of millions of taxpayers' money at risk.”
Jamie Halcro Johnston, Scottish Tory MSP, said the development “calls into question” the Scottish Government’s judgement.
He said: “Their decision to guarantee an astonishing £586m in public money to GFG Alliance for the Lochaber Smelter is looking more reckless by the day, especially given that it potentially broke state-aid rules, has failed to create the jobs that were promised and that the smelter has been valued at nothing.”
A spokesperson for the Government said: “We are aware of an investigation into audit practices at King & King.
“There has been no call on the Scottish Government guarantee, no debt is owing to the Scottish Government, all fees due to the Scottish Government are up to date and we hold a comprehensive suite of securities that are independently valued at more than the outstanding amount of the guarantee.”