The allegations against Stagecoach included buses being operated from its Inverness depot with red or amber brake, engine, and emission warning lights coming on, and holes in the side of vehicles.
The Driver and Vehicle Standards Agency (DVSA) said one of its intelligence officer was investigating the claims at Stagecoach North Scotland, which carries some 16 million passengers a year.
A worker at the firm told Scotland on Sunday: “I have personally found faults with multiple vehicles, such as amber engine management lights, amber emissions lights, amber anti-lock braking system lights and others, which, when presented to a fitter are merely signed off without them even looking at the affected bus.
“Rules are blatantly being ignored. If a driver refuses to take a bus out, they may feel intimidated by controllers/managers.
“If drivers feel threatened they generally back down and take the bus out. Very few drivers have the courage or know the rules well enough to stand their ground.
“On occasions, certain controllers rip up defect cards. The other day, a driver found a defect. He took the card into the office and it was torn up in front of him and the controller said ‘Look, no more defect’ and gave the bits back to the driver laughing.
“Fitters say they aren’t given the time to fix the buses and they get threatened/an ear bashing if they take buses off the road.”
The worker also claimed the bodywork of several buses had sharp edges or holes, which posed a safety risk.
He further alleged several buses had gone out without the operator’s licence that must be displayed to carry passengers.
Walter Brown, DVSA enforcement delivery manager for Scotland said: “Our priority is to protect everyone from unsafe vehicles and drivers.
“We are aware of the allegations against Stagecoach’s operations in the Highlands. These have been sent to a DVSA intelligence officer and it will be dealt with appropriately.”
Greig Mackay, acting director of watchdog Bus Users Scotland, said: “We will check for any sharp edges and general standards within the vehicles.”
A spokeswoman for Stagecoach said: “As soon as these claims were raised with us, we began a thorough investigation, undertaken by a director from outwith the North Scotland business.
“That on-going review has identified some deficiencies around the way some processes were being followed, and these appear to be linked to the additional work taken on by the depot at the beginning of the year, which temporarily caused added work pressure that is now being managed more effectively.
“As a result of our review, we have identified a number of areas where we will be strengthening our management and putting additional checks in place.
“We expect our people to be able to work in a professional and supportive environment where they can undertake their roles effectively and raise any concerns freely.
“However, our investigation so far has shown a number of the claims made are not currently supported by our findings. Certain other claims appear to have resulted from a simple misunderstanding.”