PLDT’s longtime auditor SGV resigns, withdraws opinion amid accounting issues

PwC takes over the telco giant’s audits after SGV earlier identified a material weakness in financial reporting controls and withdrew its 2024 and 2025 audit opinions SyCip Gorres Velayo & Co. (SGV) has resigned as PLDT's auditor after nearly 24 years, citing impaired independence under US SEC rules. SGV withdrew its audit opinions on PLDT's 2024 and 2025 financial statements due to previously uncovered accounting errors and a material weakness in internal controls. PLDT has appointed Isla Lipana & Co. (PwC) as its new external auditor, while still seeking an auditor for its international financial statements. This is AI-generated. Read the article for full context. Report any errors. MANILA, Philippines – After nearly 24 years of serving as PLDT’s auditor, SyCip Gorres Velayo & Co. (SGV) has resigned and withdrawn its audit opinions on the company’s 2024 and 2025 financial statements prepared for international reporting. SGV, the country’s largest professional services firm and a member of Ernst & Young, informed PLDT on October 31 that it was resigning after determining that it was no longer independent under US Securities and Exchange Commission (SEC) and auditing oversight rules. “SGV has now concluded that its independence was impaired as of the issuance of its Fiscal 2025 Audit Opinions, and this impairment continues through today. Accordingly, SGV has submitted its resignation as the Company’s independent registered public accounting firm,” PLDT said in a disclosure. An external auditor is supposed to independently examine a company’s financial statements and assure investors that these fairly present its finances. SGV concluded that its independence had already been impaired when it issued its 2025 audit opinions in April. While PLDT’s disclosure discussed the accounting errors and weaknesses in its financial controls, it did not specify what caused SGV’s independence to be impaired. SGV’s resignation comes after accounting errors were earlier uncovered at PLDT. In August, PLDT acknowledged these errors arising from “deficiencies in controls over the accounting for certain structured hedge arrangements.” These hedge arrangements often protect companies from financial risks, such as fluctations in currency exchange rates. The errors involved how gains and losses from these contracts were recorded in its financial statements. More seriously, SGV concluded that “a material weakness existed in the Company’s internal control over financial reporting as of December 31, 2025.” SGV had initially issued unqualified, or clean, audit opinions on PLDT’s 2024 and 2025 financial statements before now withdrawing them following the discovery of accounting issues. The auditor has since withdrawn its 2025 audit opinions, saying they “could no longer be relied upon.” On October 31, it also withdrew its 2024 opinion because it could not complete its assessment of additional accounting information before resigning. PLDT said there had been no disagreements with SGV over accounting practices or audit procedures, apart from the unfinished assessment. The telco giant also stressed the revisions identified so far were not expected to materially affect its net income, EBITDA, earnings per share, cash flows, or key operating metrics. Still, the August disclosure was serious enough for the Philippine Stock Exchange to halt trading in PLDT shares for one hour on August 14 as investors digested the news. PLDT shares later fell 4.49% to P1,170 by the end of that day. It was not PLDT’s first controversy involving financial controls. In December 2022, the company disclosed capital expenditure budget overruns estimated at P48 billion covering 2019 to 2022. A later review found no evidence of fraud, but PLDT still introduced changes to its spending controls. (READ: PLDT cleans up, moves on from capex overrun mess) Meanwhile, PLDT appointed Isla Lipana & Co., the Philippine member firm of PwC, as its new external auditor effective Monday, November 2. PwC will handle its Philippine financial statements, but PLDT is still searching for an auditor to handle its international financial statements and internal control reporting required by US regulators. PLDT’s US reporting obligations arise from its listing on the New York Stock Exchange, where its American depositary shares trade. PwC Philippines’ chairman emeritus, Alexander Cabrera, recently grabbed the spotlight as the forensic accounting expert who testified for the prosecution in Vice President Sara Duterte’s impeachment trial in October. – Rappler.com How does this make you feel? Loading