Revolut under pressure to improve internal controls following audit watchdog’s report
Revolut is facing pressure from its auditor, BDO, to improve its internal processes, after the UK’s audit watchdog raised concerns about BDO’s audit of the London fintech company’s accounts.
The fast-growing fintech firm is facing scrutiny from BDO, following a report from the UK Financial Reporting Council’s (FRC’s) in July that warned BDO’s audit of Revolut was “inadequate,” the Financial Times first reported.
Although the FRC’s July review of the quality of BDO’s audit failed to identify the firms involved, City PM understands the watchdog raised issue with BDO’s audit of Revolut, in warning the audit team’s “overall approach to revenue recognition” created an “unacceptably high” risk of “material misstatement.”
The FRC also warned that it had identified “deficiencies” in BDO’s testing of Revolut’s end-to-end payments process, as the watchdog said the audit had failed to collect sufficient evidence.
The watchdog’s report has seen BDO, the world’s fifth largest auditor, place pressure on Revolut to improve its internal controls, as auditors in turn face mounting scrutiny from regulators to treat company accounts with greater professional scrutiny.
The pressure towards Revolut specifically comes on the back of a series of recent high-profile defections in the fintech firm’s risk and compliance teams.
Revolut and the FRC refused to comment. BDO said it would not comment on clients it works for.