Steinhoff moved its primary stock market listing from South Africa to Frankfurt in 2015.
Steinhoff bought the Willenhall-based chain of discount stores for £610 million a year ago.
The findings mark a striking turnabout for billionaire Chairperson Christo Wiese, South Africa's fourth-richest man and Steinhoff's biggest shareholder, who's taking over the CEO role on an interim basis.
The news prompted its shares to plunge to an eight-year low of 15.87 rand (87p) on the Johannesburg securities exchange, wiping 60 per cent of the company's value.
In addition to purchases like the UK's Bensons for Beds, the company has made plays for appliance chain Darty in France and household-goods retailer Argos in Britain.
The JSE's director of issuer regulation John Burke told Reuters the bourse was in talks with Steinhoff to get answers on the investigation of possible accounting irregularities.More news: Whistleblower alleges Flynn texted about Russian Federation nuclear deal during inauguration, congressman says
Markus Jooste resigned on Tuesday with immediate effect. Attempts to contact Jooste were not immediately successful.
The group's share price has fallen 18.2% from Friday's closing price of R55.81 to R45.65 on Tuesday after warning shareholders on Monday its results would not be signed by its auditors.
Wiese is South Africa's fourth-richest person with a net worth of $4.3 billion, according to the Bloomberg Billionaires Index. Reuters reported last month that Steinhoff did not tell investors about nearly $1 billion in transactions with a related company, despite laws that some experts say require it to do so. According to the news agency Reuters, investors are now concerned that Wiese may be forced to sell shares he bought past year with borrowed money, which would depress Steinhoff's stock further.
Jooste was at the helm of the company for almost 20 years and oversaw its expansion to one of the world's largest household goods retailers.
Steinhoff is the owner of more than 40 brands in over 30 countries.
The company had previously said authorities there were examining whether revenue was booked correctly and taxable profit correctly declared.