Manchester Building Society has filed a negligence claim against Grant Thornton for £49m.
The building society has also accused its former auditors of breach of contract and breach of statutory duty relating to the work it did between 2006 and 2013, when Grant Thornton resigned as its external auditors.
In a statement it said: “The claim primarily covers Grant Thornton’s advice and audit services relating to the implementation and application of hedge accounting by the society.
“If the society is unable to reach a satisfactory agreement with Grant Thornton the matter will progress to a court hearing.”
The building society’s claim covers an issue which the Financial Reporting Council has been investigating since August 2013.
A spokesman for the FRC said its investigation is ongoing.
But an audit quality inspection report published last month by the FRC found that three of the eight audits that were investigated required significant improvements.
The mutual is the UK’s 19th largest building society with assets of nearly £650m.
Right to reply
A spokesman for Grant Thornton said: “As a large professional services firm, there are inevitably occasions where we become involved in legal claims.
“Naturally, our obligations of confidentiality mean that we cannot comment on the detail of any litigation in which the firm is involved.”