FinTech: Revolut’s Response To Audit Report Irks Both Its Board And Accounting Fraternity

March 30, 2023 | FinTech, News

Revolut, the UK challenger bank, is hoping to land its UK banking licence soon.

Revolut, a UK-based fintech company, has been criticized by its own board for portraying a critical audit report as a clean bill of health. The company issued a public statement insisting that the audit by BDO confirmed that the financial statements gave a true and fair view of the company’s affairs.

However, BDO had warned that revenues “may be materially misstated” and said the overdue 2021 accounts gave a true and fair view “except for the possible effects of the matters described in the ‘basis for qualified opinion’ section of our report.” (FT)

The audit had noted shortcomings in Revolut’s IT controls and raised concerns about the completeness and occurrence of revenues within three business divisions, which accounted for 75% of the group’s total reported revenues for 2021.

Notably, BDO’s audit fee from Revolut rose more than fourfold to £4.5mn for 2021.

Some board members felt that Revolut’s statement was an overreaction and showed a lack of understanding of what BDO’s opinion meant.

The board has been under pressure to improve Revolut’s culture and governance as it seeks a UK banking license.

Meanwhile, Schillings, Revolut’s lawyers wrote two letters to the Financial Times demanding changes to a news report about the audit.

The firm then clarified as follows: “The letters put forward our client’s position in a clear and unambiguous manner. This was not misleading and at all times we acted in line with our professional obligations.”

Both Revolut and BDO declined to comment on the matter.

Related Story: Revolut Reaches Profitability Milestone In 2021

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