Following Article 26, PEMEX Renews its Contract with KPMG
In March 2023, PEMEX extended its contract with KPMG. The auditing consulting company, led by Victor Esquivel in Mexico, will continue to provide auditing services to the state-owned oil company until 2025, just like it has in the past.
The external auditor's role is to provide an independent and objective opinion on a company's financial statements, ensuring they are accurate and comply with accounting standards as well as regulations. The auditing process is crucial for ensuring transparency and accountability in financial reporting, which is especially important for a mammoth state-owned company like PEMEX.
According to Pledge Times, KPMG is subject to Article 26, the guidelines for the appointment, control, performance and evaluation of external audit firms. PEMEX was satisfied with the firm’s performance after it was evaluated on criteria like quality of the audit work, compliance with professional standards, objectivity and effective communication of the findings.
In Mexico, the Federal Law of Auditing and Governmental Accountability (LFAGC) established that external firms may audit the same public entity for up to four consecutive fiscal years. KPMG would be required to take a two-year break before it can be reappointed as the external auditor for PEMEX or a similar entity. This is to ensure a regular rotation of external audit firms, which promotes competition and helps to maintain high-quality audit services.
In this case, the extension goes beyond the six-year term of Mexican President Andrés Manuel López Obrador, highlighting the importance of maintaining continuity and stability in the audit process, regardless of political changes.
According to the company’s website, KPMG is located in 143 countries. In 2022, the company collectively employed more than 265,000 partners and people, serving the needs of businesses, governments, public-sector agencies and nonprofits through KPMG firms' audit and assurance practices.