• Register
Return to: Home > News > Big Four > Scandal-hit Petrobras publishes audited multi-billion losses

Scandal-hit Petrobras publishes audited multi-billion losses

Brazilian state-controlled oil company Petrobras has accepted a $17bn impairment charge in the latest development of a bribery scandal that has sparked investigations into a number of senior government officials as well as the company's external auditors, PwC.

The oil giant published its long-awaited, audited financial results for 2014 last week, announcing an overall loss of $7.2bn.

The loss follows a $16.8bn write-off taken by the company to reflect the fall in its assets following allegations that the allocation of high-value contracts was influenced by bribes to government officials.

The results announcement comes less than a month after a group of investors in Petrobras expanded their lawsuit against the company to include the Big Four auditor.

External auditors to the company since 2012, PwC have been accused of "turning a blind eye" and "ignoring obvious red flags" in a complaint filed in Manhattan federal court at the end of March.

In November last year, the Big Four firm refused to approve Petrobras's third-quarter earnings, reportedly demanding further investigation into the already unfolding corruption scandal and threatening to report the case to US authorities.

Since then, PwC has been involved in the valuation of the impact of the corruption; the set of accounts published last week is based on estimates formulated on the basis of witness testimony to Brazilian police stating that 3% of all major contracts between 2004 and 2012 was distributed in bribes.

The corruption scheme came to light a year ago, through testimony delivered as part of plea bargains by two suspects, including a former Petrobras executive, arrested during the course of a money laundering investigation in March 2014.

Over 40 senior politicians, including the presidents of both of Brazil's houses of Congress, are currently being investigated and the scandal has sparked protests across the country.

President Dilma Rousseff herself held the post of chair of Petrobras's board between 2003 and 2010, but has been cleared of involvement by an attorney general investigation.

Contacted by IAB, a spokesperson for PwC Brazil said the firm has not been notified of any lawsuit.


Related articles:

Brazil survey: Profession upbeat despite the downturn

Top Content

    MSI joins AGN and DFK in Global Connect

    A year after AGN International and DFK International launched Global Connect, multi-disciplinary association MSI has joined the group.

    read more

    Views from the Eurozone

    With Brexit looming, populist governments gaining footholds in a number of countries and movements such as the Yellow Jacket protests in France, 2018 was anything but a quite year for the eurozone. Here leaders report to the IAB on their markets.

    read more

    Eastern promise and how to find it

    With China rising as a global power, Jonathan Minter spoke with ShineWing’s Zhang Ke and Marco Carlei at the World Congress of Accountants 2018 in Sydney, to discuss the cultural challenges that occur when Chinese networks look beyond their border, and the dividends available for those who overcome them.

    read more

    The UK: uncertain waves rule Britannia

    The UK’s accountancy profession is currently in a period of much uncertainty. The Competition and Markets Authority (CMA) has released its review into the listed audit market which could cause the biggest shake-up the profession has seen in years, the Kingman Review has described the Financial Reporting Council (FRC) as not being fit for purpose and called for it to be replaced. All the while the country remains in a deadlock on Brexit negotiations.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.