Revolut is dissatisfied with fintech audit red flags

Revolut, a cryptocurrency-friendly financial technology company, reportedly has some issues with its recently released annual report for the fiscal year ending in December 2021.

On March 1, 2023, Revolut, a British-Lithuanian neobank that allows customers to buy and sell cryptocurrencies, reported its first-ever full-year profit. The company reported a significant increase in revenue in 2021, from 220 million British pounds ($220 million) in 2020 to 636 million British pounds ($769 million) in 2021.

Independent auditors from the global accounting network BDO reviewed the financial report and confirmed that Revolut’s financial statements provided a “fair view of the group’s and the parent company’s affairs as of December 31.” Auditors emphasized that the report was accurate “except for the potential effects of the matters described in the basis for the qualified opinion section.”

BDO argued in the opinion section that the accounting firm was unable to obtain sufficient information regarding the “completeness and occurrence of certain revenues” for 2021. Stating:

“We have concluded that where the other information refers to revenue or related balances these may be materially misstated for the same reason.”

According to reports, Revolut has responded to BDO’s comments by defending the veracity of its annual report. The Financial Times reported on March 30 that Revolut issued a public statement and hired attorneys in March to prove BDO’s audit opinion was “misreported.”

The corporation maintained that the $769 million in revenues were “independently validated” and “not in dispute.”

According to sources quoted by the FT, Revolut has subsequently removed the public statement because some board members believed it was an “overreaction” and demonstrated a lack of grasp of what BDO’s view meant.

According to one source, the statement was “prepared by individuals who presumably did not fully comprehend the nuances of an audit opinion.” It also featured “inaccuracies,” according to another source.

The sources also said that Revolut’s genuine revenues might be either greater or lower than those mentioned in the report due to the possibility that certain transactions were omitted.