Retail News CRM

Tag: auditing

  • PLDT Auditor Resigns After Nearly 24 Years over Impaired Independence

    PLDT Auditor Resigns After Nearly 24 Years over Impaired Independence

    SyCip Gorres Velayo & Co. Resigned as auditor to PLDT after nearly 24 years, withdrawing its audit opinions on the Philippine telecom company’s 2024 and 2025 financial statements prepared for international reporting.

    The Ernst & Young member firm informed PLDT on October 31 that its independence had been impaired under US Securities and Exchange Commission regulations and auditing oversight rules. PLDT appointed Isla Lipana & Co., the Philippine member firm of PwC, as its new external auditor effective Monday, November 2.

    The departure follows accounting errors PLDT acknowledged in August tied to deficiencies in controls over structured hedge arrangements, with SGV finding a material weakness in internal control over financial reporting as of December 31, 2025.

    Flawed Hedges and Control Failures

    The auditor rupture follows internal accounting errors that surfaced earlier this year. In August, PLDT reported control deficiencies tied to structured hedge transactions designed to manage currency exposure, misstating how gains and losses from those contracts were recognized on its books.

    SGV concluded that a material weakness existed in PLDT’s internal control over financial reporting as of December 31, 2025. The auditor had initially granted clean opinions for both 2024 and 2025 before withdrawing them on October 31, stating the 2025 findings could no longer be relied upon while an assessment of 2024 data remained incomplete.

    PLDT told investors the revisions will not materially alter its net income, EBITDA, earnings per share, cash flows, or operating metrics. The Philippine Stock Exchange halted trade in PLDT shares for one hour on August 14 following the initial hedge disclosure, after which the stock closed down 4.49 per cent at 1,170 pesos.

    Scrutiny for Telecom Capital Markets

    For regional institutional investors, the breakdown creates immediate friction in valuation and debt covenants. Telcos across Southeast Asia carry high use to fund network upgrades, making absolute confidence in treasury and derivative controls essential for bondholders and banks.

    The resignation deepens regulatory vulnerability because PLDT maintains American depositary shares on the New York Stock Exchange. While Isla Lipana took over the Philippine accounts, PLDT has not yet secured an accounting firm to audit its international financial statements and sign off on internal control reporting mandated by US regulators.

    Overrun Precedents Dog Balance Sheet

    This is the second major breakdown in PLDT’s financial administration in four years. In December 2022, the group disclosed a 48 billion peso capital expenditure overrun accumulated between 2019 and 2022, prompting an internal overhaul of its procurement protocols even after an external review found no fraud.

    The hedge accounting breakdown shows those spending overhauls failed to insulate broader treasury management from control failures. SGV’s sudden withdrawal of two years of audit statements leaves PLDT operating without verified baseline books for international market compliance.

    PLDT must now install a US-registered independent accounting firm to complete the international audits, while investors monitor whether restatements ripple across its upcoming quarterly earnings reports.

  • EY Bags the Elephant With UBS Audit Deal

    EY Bags the Elephant With UBS Audit Deal

    UBS selects EY as its auditor for the expanded bank following its takeover of Credit Suisse in March. PwC will audit Credit Suisse’s books for 2023.

    EY will have lots more work to do at UBS starting next year, having been retained to audit the merged entity starting next. The Big Four firm has been auditing UBS’s books since 1998, charging it $70 million last year for its services, while Credit Suisse paid PwC $90 million.

    EZ declined to comment on whether it was retained by UBS, saying only that The size and scale of the global EY financial services audit practice means we are able to access resource and specialist skills from across our network.

    The firm can tap into a global staff of about 20,000 bank auditors. The source told the FT that EY’s international operations are more closely integrated than those of its rivals, making it easier for resources to be shared internationally.

    The report went on to say that EY will probably have to drop the work that it does for Credit Suisse to avoid conflicts of interest. The auditor was hired about two years ago by Credit Suisse to look into anti-money laundering measures in its Asian wealth unit.

    PwC has a much shorter relationship with Credit Suisse than EY does with UBS. In 2020, PwC replaced KPMG as Credit Suisse’s external auditor. Earlier this year, Credit Suisse had to delay the release of its annual report after an SEC inquiry.

    The report came out mere days before Credit Suisse was taken over by UBS on March 19.

    On March 10 the SEC asked the bank to explain how it concluded entity-level material weakness did not exist for fiscal years 2021 and 2022, according to the documents.

    EY is not without blemish, having signed off on the books of German fintech Wirecard which collapsed in 2020. It was subsequently barred for two years from bidding for audit contracts for publicly listed companies in Germany.

    UBS, Credit Suisse, and PwC declined to comment to the FT.

    Lees ook:

    Lees ook: