Revolut, the UK-based fintech firm, has had a difficult year with its annual report only just being signed off after months of delays, regulatory scrutiny and the revamping of internal accounting systems.
Revolut’s auditor, BDO LLP, revealed that it was not able to independently verify three-quarters of the £636m ($765m) revenue reported in the accounts.
In the annual report, BDO said that the financial statements gave a “true and fair view of the state of the group” but warned that some information may be “materially misstated”.
The auditor raised concerns that verification procedures were not able to “provide sufficient appropriate assurance” over £477m in revenue from subscriptions, cards, foreign exchange and wealth activities.
The company’s “IT systems weren’t designed in such a way that would allow for IT or business process controls to be effectively tested throughout the year,” BDO added.
Revolut’s Chief Financial Officer, Mikko Salovaara, said that there is “not any doubt over the completeness of the balance sheet, which, in turn, logically means that total revenue is also correct”.
A spokesperson for the company also said that the overall revenue figure “was not in question” and that BDO’s concerns were “remedied in 2021”.
Profit in 2021
Despite the difficulties surrounding the accounts, Revolut made its first full-year profit in 2021 of £26m after a 2020 loss of £223m, as total revenue nearly tripled.
The boom in cryptocurrency trading was a key part of the group’s business and helped revenue jump by 33% in 2022 to over £850m.
Revolut has replaced its internal accounting systems following the Financial Reporting Council’s criticism that the audit for 2020 was “inadequate”. Revolut was valued at around $33bn in its last funding round in 2021, and it has raised about $1.7bn from SoftBank and others since its debut in 2015.
Although Revolut applied for a UK banking licence two years ago, it has yet to be authorised. Salovaara said that the company is at the “very final stage of the process” and added that it will “eventually be a public listed business, but it’s not a priority”.
Revolut’s difficulties surrounding the 2021 accounts and the delays in receiving a UK banking licence have not impacted the firm’s overall success.
However, it is clear that there are issues surrounding the verification of revenue, which Revolut has addressed.
With a CFO who joined in 2021 and the replacement of its internal accounting systems, it remains to be seen what the future holds for Revolut.