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Vatican cancels full external audit of its finances

PricewaterhouseCoopers (PwC) is one of the world's 'Big Four' international accountancy firms (AP)

The Vatican has cancelled a full external audit of its finances.

The Holy See suspended the audit by PricewaterhouseCoopers (PwC) in April in order “to examine the meaning and scope of certain contract clauses”.

In a statement released today, the Vatican said it had concluded that “by law, the task of performing the financial statement audit is entrusted to the Office of the Auditor General”, rather than an external auditor.

It insisted that this is “normally the case for every sovereign state”.

It said that “PwC will play an assisting role” in the audit and “will also be available to those dicasteries that wish to avail themselves of its support and consulting services”.

It denied that the cancellation of the full external audit was a blow to efforts to reform Vatican finances.

The statement said: “It is important to clarify that, contrary to what has been reported by some sources, the suspension was not due to considerations regarding the integrity or the quality of PwC’s work, nor is it attributable to the desire of one or more entities of the Holy See to hinder reforms.

“The path towards a correct and appropriate implementation of International Public Sector Accounting Standards (IPSAS) is normally complex and prolonged. That path requires a series of legislative choices as well as the adoption of administrative and accounting procedures, which are presently under development.

“Keeping in mind the valued activity already carried out by PwC, the Holy See announces that the parties, have entered into a new agreement which, in conformity with the institutional framework, provides for a broader collaboration with PwC that is adaptable to the Holy See’s needs.

“This agreement permits all of the entities of the Holy See to participate more actively in the reforms under way. With this initiative, the Holy See will promptly reassume its collaboration with PwC.

“The commitment to the economic-financial audit of the Holy See and of the State of Vatican City has been, and remains, a priority.”