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  • PwC Argentina Transparency Report Our focus on audit quality Year ended June 30, 2019

  • Welcome to our 2019 Transparency Report. I am delighted to share our report with you, which includes information about how the firm is governed and includes updates on our activities. While our firm is a multidisciplinary firm, this report is primarily focused on our audit practice and related services.

    Our purpose is to build trust in society and solve important problems. We seek to bring our purpose to life in everything we do. There can be no trust without confidence and building and maintaining confidence in audit is vitally important.

    To this end, our people are key to performing high quality audits and we draw upon a wide range of specialist skills across our multidisciplinary practice. Our people are also critical to embedding good governance and culture throughout the firm. We continue to recruit and promote talented individuals throughout our Assurance practice.

    Our world is changing quickly and so are we. We are making investments in our people and in our technology to ensure quality is at the heart of everything we do. We are preparing ourselves to build a digital future for our clients and our people. We are proud of the important contributions we make to a wider society. At a time of uncertainty in the global economy, global political upheavals, social divisions, unprecedented concern about the environment, and our own country’s political climate uncertainty, we believe business has an important role to play in creating opportunities.

    Throughout our 100+year history, we have sought to build trust and solve important problems and to do this we have had to transform our business to stay relevant - this year is no different!

    Our audit profession worldwide continued to be scrutinized. Make no mistake; this obliges us to stay focused on audit quality and our role in society. Challenges are good they create awareness and opportunities. Audit quality is the primary driver for our audit professionals and we believe we have a high quality audit practice. However, we do not rest on our laurels and we continue to invest in improving the consistency of audit quality to reflect the increasing complexity of businesses and regulatory and governance requirements. Audit quality continues to be fundamental to our business and we continually review and update our audit processes in response to internal and external findings.

    As part of our investments to enhance audit quality, we established a Centre of Excellence based in Buenos Aires, Argentina, which supports our Latin America Region’s professionals serving clients subject to PCAOB audits. The creation of this center together with additional investment in training, people and technology will further enhance our audit quality.

    We are also investing in digital upskilling. We are convinced that the proper combination of innovative technologies and talented people will help drive audit quality. For us, the technology we use - from cloud-based tools like Google, Salesforce and Workday - through to AI solutions, has changed how we work together to deliver for our clients. However, these innovations are just part of the story - our clients want more than our technology skills; they require our human insight and business understanding too and that is why we always invest in the skills and development of our people.

    We have also consciously widen access into our firm to multidisciplinary professionals from diverse backgrounds. We recruit graduates and interns and we continue our programs to allow very young students to have internships with us. We believe that achieving and investing in a greater diversity of talent is not only the right thing to do but it is also making our business stronger.

    And the more we can continue to grow stronger, the bigger the positive economic and social impact we can make, remaining relevant into the future.

    I hope you enjoy reading our report.

    Santiago Mignone Territory Senior Partner

    Welcome to PwC Argentina´s 2019 Transparency Report

    Territory Senior

    Partner’s message

  • Contents Key messages

    Opening message 03

    Our focus on audit quality 06

    Our technology 09

    Other information

    1 Legal structure and ownership 11

    2 The PricewaterhouseCoopers network 14

    3 Governance structure of PwC Argentina 18

    4 Internal control and internal quality control systems 21

    5 Independence policies and practices 34

    6 External monitoring 36

    7 Our people 37

    8 Financial information 42

    9 Remuneration of partners 42

    10 Public interest entities 42

    People´s survey Investing in our people1,615 people responded our

    People Survey in 2019 Investment in training and development

    176,613 hours of training and personal development by Assurance people in 2019

    2019

    88% equal percentage in 2018

  • 4 | PwC Argentina - 2019 | Transparency Report

    Our focus on audit quality

  • Transparency Report | PwC Argentina - 2019 | 5

    Our approach Performing audits in accordance with professional standards is an important way that we fulfill our purpose to build trust in society and solve important problems. Each year we issue audit reports regarding hundreds of public and nonpublic companies. We conduct our audits following applicable auditing standards in order to obtain reasonable assurance regarding whether the financial statements are presented fairly, in all material respects.

    Although reasonable assurance is a high level of assurance, it is not a guarantee. An audit involves examining the underlying audit evidence, including information and reports provided by the company, on a test basis. In some circumstances, we also rely on—and for many companies, test and opine on—a company’s internal control over financial reporting, which due to inherent limitations may or may not prevent or detect misstatements. We are proud of the important role that audit opinions play in the capital markets, and how they help us to fulfill our broader purpose as a firm.

    We innovate our audit process by standardizing, simplifying, and automating our work to promote doing the right work at the right time. This supports consistency in the execution of our procedures, promotes adherence to professional auditing standards, and improves the experience for our clients through earlier identification and resolution of potential issues.

    Foundational to our methodology is the assessment of risk. Our audit risk assessment begins in the planning phase of the audit and continues through the issuance of our report. After we gain an understanding of the client’s business processes and consider the impact of changing conditions, we identify and evaluate the risks within the processes and develop audit procedures responsive to the client’s circumstances. We reinforce the importance of appropriate planning and phasing of audit work by setting realistic audit planning deadlines. Further, the timely engagement of audit partners and managers during planning facilitates the appropriate consideration of audit risk and the planned response.

    Quality is fundamental to sustaining our brand and the value we deliver to our clients and represent to the capital markets, the investment community, and other stakeholders…and is inherent in our Purpose.”

  • 6 | PwC Argentina - 2019 | Transparency Report

    comply with auditing standards;

    use our experience to identify and resolve issues early; and

    exercise professional skepticism;

    apply a deep and broad understan- ding of our clients’ businesses and the financial environment in which

    they operate.

    At PwC, “audit quality” means that we consistently:

  • Transparency Report | PwC Argentina - 2019 | 7

    Our audit quality principles are achieved through our audit quality practices and mean that we:

    In the interest of continuous improvement, over the past year we have:

    Transformed our public and nonpublic audit policy and methodology guides to make them easier and more effective for engagement teams to use.

    Introduced customizable cloud-based disclosure checklists.

    Expanded our use of data auditing tools.

    Enhanced our methodology, training, and audit performance and documentation tools in response to new accounting standards (e.g., revenue, leases, credit loss) and other events that may impact our clients’ financial statements (e.g., cybersecurity, tax reform).

    Responded to the PCAOB’s adoption of a new auditor reporting model with guidance, templates, and consultation support, and are working with our clients to implement the new requirements related to Critical Audit Matters.

    Increased leverage of resource pools and introduced Centers of Excellence in certain audit areas to leverage our audit solutions.

    embrace the supervision and review process

    as a way to continuously

    improve;

    plan our work in a timely

    and thorough fashion;

    recognize our role in the capital markets;

    stay current on

    professional standards;

    apply an objective and

    skeptical mindset;

    are the audit committee’s independent

    “eyes and ears;”

    remain alert for issues that need deeper analysis; and

    ask tough questions;

    act with professionalism.

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