The United Kingdom’s Financial Reporting Council has launched an investigation into whether PricewaterhouseCoopers’ U.K. firm was independent when it conducted an audit of a company on which one of its former partners joined the board.
The FRC announced the investigation Tuesday of PwC’s audit of Berkeley Group Holdings’ financial statements for the year ended April 30, 2012, as a result of a former partner joining the board of the homebuilding company. Former PwC U.K. vice chairman Glyn Barker became a non-executive director of the company in January 2012.
PwC does not believe he was involved in the conduct of the Berkeley audit and was not involved in any matters of audit judgment. The FRC is investigating whether he was in the “chain of command” by receiving feedback from the company on the firm and audit partner.
“We can confirm that we have received a letter from the FRC informing us that they are commencing an investigation,” said a spokesperson for the firm. “We will continue to fully cooperate with the FRC's enquiries. We take our independence responsibilities very seriously.”
The FRC sets the U.K. Corporate Governance and Stewardship Codes as well as U.K. standards for accounting, auditing and actuarial work, and represents U.K. interests in international standard-setting. It also operates independent disciplinary arrangements for accountants and actuaries, and oversees the regulatory activities of the accounting and actuarial professional organizations.
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