Watchdog launches probe of PwC audit

THE UK’s accounting watchdog yesterday said it had opened an investigation into whether PwC was acting independently when it audited accounts for housebuilder Berkeley Group.

Stephen Haddrill heads the Financial Reporting Council. Picture: Submitted

The Financial Reporting Council (FRC) said the probe would look at the audit of Berkeley’s financial statements for the 2011-12 financial year as a result of a former PwC partner joining Berkeley’s board.

PwC – still Berkeley’s auditor – confirmed it had received a letter from the FRC, which is headed by Stephen Haddrill, saying an investigation has begun.

“We will continue to fully co-operate with the FRC’s enquiries. We take our independence responsibilities very seriously,” PwC said in a statement.

Berkeley chairman Tony Pidgley said he was told on Friday about the investigation into the role of non-executive director Glyn Barker. “As far as we’re concerned Glyn has had a very distinguished career and we are pleased to have him on the board,” Pidgley said.

Barker joined Berkeley’s board in January 2012 but is not thought to have been on the team that audited the company in the two years prior to his departure from PwC.

Under FRC rules, staff leaving to join the board of a company which a firm audits should not be in the “chain of command” or have been involved in matters of judgment for at least two years.