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Revolut has frus­trated Its Own Board.

Revolut
 Revolut has frus­trated its own board and raised eye­brows in the account­ing industry after por­tray­ing a crit­ical audit report as a clean bill of health.

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 affairs.
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».
This sec­tion noted short­com­ings in Revolut’s IT con­trols and said BDO had been unable to sat­isfy itself of the «com­plete­ness and occur­rence» of rev­en­ues within three busi­ness divi­sions totalling £477mn, 75 per cent of the group’s total repor­ted rev­en­ues for 2021.
Revolut’s state­ment also cri­ti­cised «mis­re­port­ing» of the audit opin­ion in the media and said that all £636mn of its rev­en­ues had been «inde­pend­ently veri­fied» and were «not in ques­tion».
Some board mem­bers felt the state­ment was an «over­re­ac­tion» and showed a lack of under­stand­ing of what BDO’s opin­ion meant, accord­ing to two people with know­ledge of the mat­ter.
The state­ment «was writ­ten by people who prob­ably didn’t fully under­stand the nuan­cing of an audit opin­ion», said one of the people. It con­tained «inac­curacies», said a second.
The group’s press and legal depart­ments have been instruc­ted not to take sim­ilar actions in future «without con­sulta­tion», said a senior com­pany insider.
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.
BDO, whose audit fee from Revolut rose more than fourfold to £4.5mn for 2021, declined to com­ment.
Revolut’s state­ment said BDO’s report should be under­stood to mean «that it was not pos­sible to pre­cisely con­firm how much was attrib­ut­able to each par­tic­u­lar stream but does not refer to lack of veri­fic­a­tion over rev­enue over­all».
However, two people with know­ledge of the audit told the FT that BDO’s decision to qual­ify the accounts had not been based on the alloc­a­tion of rev­en­ues between busi­ness streams.
«If BDO felt that the only issue was an alloc­a­tion issue, they would have worded their opin­ion to make that clear,» said another per­son close to Revolut with know­ledge of the audit.
It was pos­sible that true rev­en­ues could be higher than stated because some trans­ac­tions could be miss­ing, or lower because BDO had to resort to pro­ced­ures such as check­ing sample trans­ac­tions mean­ing prob­lems could have been missed, said some of the people with know­ledge of the audit.
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