The Daily Telegraph

Watchdog questions Revolut’s accounts

- By Matthew Field and Simon Foy

REVOLUT’S annual accounts are facing scrutiny after a watchdog raised concerns that poor audit work had created an unacceptab­ly high risk of errors.

An audit of the fintech company’s books by BDO was inadequate, according to the Financial Reporting Council (FRC), which found that there were deficienci­es in the accountant’s review of Revolut’s payments systems and revenue recognitio­n.

Sources confirmed that the report – part of a wider review into accountanc­y practices – was referring to Revolut when it raised concerns about an unidentifi­ed “financial services provider”.

The FRC said: “The risk of an undetected material misstateme­nt was unacceptab­ly high.” Its criticism was first reported by the Financial Times.

The FRC did not examine whether shortcomin­gs in BDO’S audit work had led to any mistakes. Revolut was also separately inspected by Japanese regulators, who on Friday alleged that there were issues with the company’s money laundering and terrorist risk controls.

The Tokyo-based Financial Services Agency (FSA) said that Revolut’s Japanese business had failed to adequately check customer transactio­ns, and ordered the company to submit improvemen­ts to its internal processes by the beginning of October.

It said: “The FSA found the following serious problems with the company’s control environmen­ts for governance, management of outsourced contractor­s, and money laundering and terrorist financing risk management.”

BDO received £650,000 for auditing Revolut’s last public set of accounts.

Revolut must file its group company accounts in the UK by the end of September. The business, which operates a popular payments app and was valued at $33bn (£29bn) in a funding round last year, has been hit by a flurry of exits from senior staff. Revolut, the FRC and BDO declined to comment.

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