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FRC investigates PwC audit of Berkeley

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19th Sep 2013
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The Financial Reporting Council is investigating whether a PwC audit of Berkeley last year was independent after a former partner at the Big Four firm joined the board of the housebuilder.

The accounting watchdog said it was examining the audit of Berkeley Group Holdings' financial statements for the year ended 30 April 2012.

The FRC declined to comment further on its investigation. Berkeley declined to comment.

A report in the Financial Times said that "people with knowledge of the matter" said the probe concerned the role of Glyn Barker, a PwC partner who became a non-executive director on Berkeley’s board during the year in question.

The people told the FT that the FRC was investigating whether Barker was in a “chain of command” role at PwC when the firm was auditing Berkeley’s accounts, in the lead-up to him joining Berkeley’s board, in January 2012.

One person familiar with the investigation told the FT that Barker was not on the team that audited the housebuilder in the two years before he joined Berkeley’s board. PwC is still Berkeley’s auditor.

PwC said in a statement: "We can confirm that we have received a letter from the FRC informing us that they are commencing an investigation. We will continue to fully cooperate with the FRC's enquiries. We take our independence responsibilities very seriously." 

PwC is the latest auditor to be investigated this year over its independence to its client.

Earlier in the month, the FRC fined Deloitte £14m for failing to manage conflicts of interest in its advice to MG Rover Group.

A month earlier the FRC said it was investigating Grant Thonrton's audit of Nichols, a drinks company.

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