As per reports, UK financial regulators have found flaws in the auditing report of Revolut, the neobank that offers crypto investment services.
A Financial Reporting Council report in July revealed that an audit by accountancy firm BDO of an unidentified “financial services provider” was found to be inadequate and had a risk of an undetected material misstatement. Note that people familiar with the matter reported this unnamed company to be Revolut.
As a result, Revolut, which is among Europe’s most valuable private fintech companies, is now under pressure to improve its internal controls i.e the systems that make sure its financial reporting is reliable. The pressure is so that the firm complies with legal and regulatory requirements.
A person familiar with the matter also warned that a stricter approach by BDO could cause delays in filing its accounts, especially at a time when the majority of the filing is due at the end of the month.
The report suggested that late filing could lead to the prosecution of company directors, in this case, Revolut founder and CEO Nikolay Storonsky.
A person familiar with the case disclosed that Revolut must improve “unsexy things like its back office and controls” because it “needs to have a back office like a bank and it’s got the culture of a tech firm.”
The report comes at a time when the firm has been hit by employees quitting in its risk and compliance departments including its UK heads of risk, compliance and money laundering.
These repercussions probably surfaced after Storonsky complained in a recent interview about the time that regulators are taking to consider its banking licence application.
Also Read: Cyprus Regulators Allows Revolut to offer Crypto Services
