Heavily indebted Evergrande has become a symbol of the years-long crisis in China's property market, and last month its onshore unit was accused of a $78 billion revenue overstatement.
PwC was the auditor for Evergrande for more than a decade before resigning last year amid disagreements on the audit of the firm's 2021 accounts.
On Friday, Hong Kong's Accounting and Financial Reporting Council said "a whistle-blower report" had come to its attention.
"The report expressed significant concerns regarding potential alleged deficiencies in PricewaterhouseCoopers' systems of quality management and the quality of the audits of China Evergrande Group," it said in a statement.
"Given the gravity of these allegations and the necessity to safeguard the interests of the investing public... the AFRC is obliged to initiate an investigation."
The probe comes after an anonymous letter was circulated last week -- titled "Who led PwC into the firepit that was Evergrande?" -- and drew condemnation from the accounting firm, which said it contained "inaccurate statements and false allegations".
PwC also said it had reported the matter to authorities and would investigate the incident with "high priority".
AFP is unable to verify who wrote the letter and its claims.
Chinese authorities are examining the role of PwC in auditing Evergrande, though no decision regarding penalties has been made, Bloomberg News reported last month.
Chinese regulators said last month they would ban Evergrande chair Xu Jiayin from the securities market for life on grounds of financial fraud.
Earlier this year, the real estate behemoth was handed a winding-up order by a Hong Kong court after struggling for years to repay creditors after its 2021 default.
dhc/mtp
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