Devon and Cornwall Police has confirmed it is investigating concerns over funding at a church in Penzance.
The Diocese of Truro said it first became suspicious around two years ago.
It informed police that there might be irregularities in money belonging to St Mary the Virgin church.
One man has been arrested.
Diocesan secretary, Esther Pollard, released the following statement: "Approximately two years ago we began to suspect there might be historic irregularities in certain funds belonging to St Mary's.
"We immediately notified the police of these suspicions. We understand these matters form part of an on-going, active investigation by the police and an arrest has been made, so are unable to provide further comment until the investigation is concluded.
"However, once these suspicions came to light, the Diocese also put many checks and balances in place in the parish. We are confident that the stewardship of all money belonging to Penzance Parish Church is now robust and proper."
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