Revolut’s response to an audit of its books has reportedly drawn criticism from its board.
Earlier this month, the British FinTech had announced that an opinion by auditors “confirmed that ‘the financial statements give a true and fair view’” of its business.
But as the Financial Times (FT) reported Thursday (March 30), the auditor had actually warned that revenues could be “materially misstated.”
In addition, there was also a caveat that came with the “fair and true” remark, referring to another section of the audit in which auditor BDO points to faults in Revolut’s IT controls, and says it had been unable to determine the “completeness and occurrence” of earnings that account for 75% of the company’s 2021 revenue.
According to the FT, this disconnect has led some Revolut board members to call the company’s response an “overreaction” that showed a misunderstanding of BDO’s opinion.
The statement “was written by people who probably didn’t fully understand the nuancing of an audit opinion,” one source told the news outlet, while another said it contained “inaccuracies.”
Revolut declined to comment when contacted by PYMNTS Thursday.
The FT report also quotes Michael Power, professor of accounting at the London School of Economics, who called Revolut’s statement as “bizarre.”
“They neglect to mention the ‘except for’ rider to that opinion,” he said.
And senior audit partner at another firm said the company’s statement was “very inflammatory and . . . just wrong.”
As PYMNTS reported earlier this year, the long wait for the BDO report on Revolut had “left a question mark over the company’s finances as regulators pressure it to improve its audits and internal controls for financial reporting.”
And as noted here last year, the company had been pressured to upgrade its internal financial reporting controls, after the U.K.’s Financial Reporting Council found that Revolut’s audits were flawed and had a high risk of “misstatement.”
An earlier report by the FT said Revolut’s payments business had lost a number of key personnel in its risk and compliance operations.
“The auditors are being significantly more challenging now, because they’re getting beaten up by their regulators,” a source told the FT.