Venezuela news: The Big 4 audit perspective
Allow me a bit of nostalgia as we follow this truly incredible news today.
Gift link to New York Times coverage.
Trump pressed oil executives to give $1 billion for his campaign, people in industry say “This is a scandal” and “an indictment of the system” — but probably legal, one legal watchdog told POLITICO.
By Ben Lefebvre 05/09/2024 07:29 PM EDT
Former President Donald Trump asked oil industry executives last month to donate $1 billion to aid his campaign to retake the White House, three people familiar with the conversation told POLITICO — a request that campaign finance experts said appeared troubling but is probably legal.
The request, first reported Thursday by The Washington Post, occurred during a meeting of industry executives at the former president’s home in Palm Beach, Florida.
Who is signing the audits for PETRÓLEOS DE VENEZUELA, S.A. Y SUS FILIALES (PDVSA)?
This report was prepared in 2022.
Weak Oversight Mechanisms
Most of the financial debt that PDVSA and its partners had incurred to finance the construction of three FPO projects was cancelled between 2004 and 2006. This was the first step for PDVSA to stop reporting its financial statements to the U.S. Securities and Exchange Commission (SEC) as of 2006, thus eliminating one of the main external watchdogs.
Although PDVSA has always been audited by local representations of international auditing firms (KPMG since 2001, and PricewaterhouseCoopers before that), after the SEC obligations were terminated, the publication of audited financial statements became fully discretionary. Such reports, or interim (semi-annual) reports, were generally issued just prior to any bond or other debt issue, which resumed in 2007 with the first issue of $7.5 billion in unsecured bonds. In addition, although audit firms rely on their reputation, at the end of the day it is the client, in this case PDVSA, who pays for that professional service.
Relationship with Independent Auditors Relationship with joint venture partners
The external auditors used to set up their teams of accountants and consultants at PDVSA’s offices to facilitate access to information and interaction with PDVSA personnel responsible for providing such data. Especially after the Oil Strike, KPMG teams kept a permanent presence at PDVSA and not only for the duration of the audit. The external auditors also worked in collaboration with the internal auditors and the Commissioner. Despite the fact that the external auditors are supposed to continue doing their job, PDVSA has not published its audited financial statements since 2016.
I worked proudly for KPMG and its successor consulting firm, BearingPoint, from 1993 until 2001, in the U.S. and Latin America. My last title was Managing Director — the first woman MD in the region — leading BearingPoint’s Industrial, Automotive, and Transportation Practice in Mexico, Brazil, Colombia, Venezuela, and Argentina. PDVSA, as well as Pemex and Ecopetrol were clients. I was held up unexpectedly in the US in the fall of 2001, after the tragic events of 9/11, and reluctantly decided to leave the firm to return to work in the US.
Even then, wealthy, educated colleagues left when they could. I recall one partner who, as BearingPoint split from KPMG LLP throughout the region, abandoned Venezuela and his team to go live and work in Mexico. I had to try, as an expat permanent traveler US citizen, to maintain responsibility for clients in the region, and to support junior staff who attempted to sell new projects to save their jobs. Given I had no signing authority in Venezuela it was a futile effort. Eventually most of the Venezuelan team also fled, for other parts of South America, US, Netherlands and Canada.
There are five Venezuelan audit firms registered with the PCAOB. Two of them are not even filing an annual report with the PCAOB.
Only one, PwC, has any involvement with a US issuer.
https://www.pwc.com/ve/es/acerca-de-nosotros/quienes-somos.html
This info is at odds with what you find when you look up PwC Venezuela. You also find Pacheco, Apostólico y Asociados as seemingly the member firm in Venezuela.
© Francine McKenna, The Digging Company LLC, 2026