Watchdog probe into Big Four firm’s independence in audit of Berkeley

The Financial Reporting Council (FRC) said the probe would look at the Big Four firm’s audit of Berkeley’s financial statements for the year ending April 30, 2012, 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 saying an investigation has begun.

”We will continue to fully cooperate 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 very pleased to have him on the board,” Mr Pidgley said.

Mr Barker joined Berkeley’s board in January 2012 after a 35-year career at PwC, serving most recently as the accountant’s UK vice chairman.

A source said Mr Barker was not on the team that audited Berkeley in the two years prior to his departure from PwC.

During those two years, Mr Barker asked Berkeley for feedback on PwC’s performance as auditor, the person said.

Berkeley shares have risen by a fifth this year on the back of the relative resurgence in the housing market, particularly in London where the company is focus- ed.