Revolut has frustrated its own board and sparked concerns in the accounting industry after portraying a critical audit report as a clean bill of health, according to a report in the Financial Times.
The fintech company issued a public statement and hired lawyers this month to insist that an opinion by auditors BDO “confirmed that ‘the financial statements give a true and fair view” of the company’s financial position.
But in fact, 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,” the FT said.
This part of BDO's report noted shortcomings in the fintech’s IT controls and said BDO had been unable to satisfy itself of the “completeness and occurrence” of revenues within three business divisions totalling £477mln around 75% of total reported revenues for 2021.
The FT quoted Michael Power, professor of accounting at the London School of Economics, who described Revolut’s statement as “bizarre”. “They neglect to mention the ‘except for’ rider to that opinion,” he said.
A senior audit partner at another firm was quoted as saying the company’s statement was “very inflammatory and . . . just wrong”.
The group’s press and legal departments have been instructed not to take similar actions in future “without consultation”, said a senior company insider cited by the FT.
The board, chaired by City veteran Martin Gilbert, has been under pressure to improve Revolut’s culture and governance as it seeks a UK banking licence.
Revolut’s lawyers, Schillings, wrote two letters to the Financial Times demanding changes to a news report about the audit. The letters made claims similar to those in the public statement, including that “the annual report confirmed that the overall revenue generated by Revolut was correct”.
Revolut published its 2021 accounts five months after they were originally required to be filed and two months after an extension to the deadline expired.