Earlier in the day Harvey Norman had issued a "clarifying statement" to the ASX following contact from the Australian Securities and Investments Commission.

ASIC had got in touch with the company in the wake of yet another ASX announcement responding to a speeding ticket from the Australian Stock Exchange.

In that ticket the ASX specifically asked Harvey Norman whether ASIC was reviewing its accounts as asserted in an Australian Financial Review article.

Harvey Norman told the ASX the media reports had included false statements and assumptions including on the question of an ASIC review.

Thursday's clarifying statement said that Harvey Norman "discloses that ASIC is undertaking a routine review of HVN's financial report" for the last financial year "as part of its financial reporting".

BusinessDay and the Australian Financial Review then reported that ASIC was "investigating" the company.sparking yet another ASX announcement branding both reports "false".

"ASIC is not investigating the accounts of HVN," the statement said.

It then went to tell "interested parties" they should contact ASIC's media unit "for confirmation".

When Fairfax Media did then contact ASIC a spokesman said the agency would not "ever comment' on whether its action was a "review" or an "investigation".

However its routine review guidelines state a company will only know ASIC is reviewing its accounts if ASIC feels there "are issues which we feel need clarification by the company"..

EY 'in the room'

The stoush deepened as it emerged prominent accounting firm EY was drawn into the controversy over its complex business structure.

It's understood the retailer's auditor EY has been "in the room" with Harvey Norman during meetings with ASIC dating back to late last year despite outspoken co-founder Gerry Harvey's claim on Tuesday that there was no ASIC investigation.

The timing of ASIC's involvement is important because it dates back to a failed attempt to vote down Harvey Norman's accounts at its annual general meeting in November on the basis that there was insufficient detail on the financial performance of if franchisees.

In its earlier statement on Thursday, Harvey Norman said It "remains the view of the company that the financial report of Harvey Norman for the year ended June 30 2016 and the financial report for the half year ending December 31, 2016, each lodged with ASIC and ASX are in accordance with the law."

Structure critics

Critics of Harvey Norman's complex corporate structure claim the franchised stores are "virtually controlled by the mother ship" and aren't operating as franchises.

It's understood ASIC's questioning is focused on whether the franchised stores should be incorporated into Harvey Norman's accounts, which would provide investors with significantly more detail on how they are trading.

There is no suggestion Harvey Norman hasn't adhered to the accounting standards but retail analysts question loans totalling more than $1 billion dollars to franchisees, including troubled traders.

Harvey Norman's share price plunged close to 9 per cent on Monday, wiping $100 million from Mr Harvey's personal wealth and spurring him to spend close to $9 million on stock to try and shore up the price.

Market analysts pointed to executive director David Ackery's $1.5 million stock sell-down just one day after managing director Katie Page, who is also Mr Harvey's wife sold $1.06 million worth to stock to explain the share price rout but concerns over Harvey Norman's accounts date back at least as far as the retailer's annual general meeting last November.

Proxy adviser Ownership Matter called on shareholders to vote down Harvey Norman's accounts at this meeting in a bid to pressure the retailer into incorporating its franchised accounts and providing greater clarity on loans to troubled franchisees.

Mr Harvey blames short sellers for the collapse in the Harvey Norman share price as well as other parties, including the media, which he claims are "wittingly or unwittingly" involved in "manipulation" of the share price.

The Australian Securities and Investments Commission declined to comment on wether it had spoken to EY or Mr Harvey's claims of market manipulation. EY said it would not comment on an audit client.