Accountancy firm PricewaterhouseCoopers said it would vigorously defend allegations of malpractice in its role as auditor of collapsed bus maker Mayflower.

It faces unlimited fines if complaints by Britain's auditing watchdog are upheld.

PwC, which carried out the audit of Mayflower's accounts for 2002, described the complaint as "misconceived" and said it was confident its work was "planned and conducted with due skill and care".

The prosecution follows an investigation by the Accountancy Investigation and Disciplinary Board (AIDB) into PwC's role at Mayflower, which collapsed last year with debts of £180 million.

A tribunal, which will decide the case, also has the power to exclude companies from professional bodies or withdraw their practising licences,

One of two complaints by the AIDB refers to the auditor's treatment of Mayflower's going concern status, before it filed for bankruptcy in 2004.

PwC said it would defend itself at the formal hearing, which will be in front of five adjudicators on a date to be decided.

A spokeswoman for PwC said: "We are surprised the AIDB has chosen to file disciplinary complaints against this firm.

"Since then we have examined the conduct of the relevant audits and we are very confident they were planned and conducted with due skill and care."

Staff from the London office of PwC carried out the audit for the 2002 financial year, and were undertaking the same task for 2003 accounts, when the company collapsed.

The AIDB is also prosecuting Mayflower's former finance director David Thomas Donnelly, and is still investigating a former employee of a Mayflower subsidiary. The AIDB is separately investigating Deloitte over its role as auditor and adviser to Mayflower customer, MG Rover.