Revolut Said to Be Under Pressure From Regulator Over Risk of 'Material Misstatement' in Auditing: Report
The auditor of Revolut, a digital bank that earns up to 10% of revenue from crypto trading, was criticized by the U.K. accountancy and auditing watchdog, the Financial Reporting Council (FRC).
Sep 5, 2022 at 12:49 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/GUJQEG76TBHW5OPZPDKKBFNUMQ)
(Shutterstock)
Jamie Crawley is a CoinDesk news reporter based in London.
Crypto-friendly digital bank Revolut is under pressure from U.K. regulators after an "unacceptably high" risk of "material misstatement" was highlighted in the auditing of its accounts, the Financial Times reported Monday.
- An audit of an unidentified company by BDO was criticized by the Financial Reporting Council (FRC), the accountancy and auditing watchdog.
- The "financial services provider" under audit was identified as Revolut by people familiar with the matter, the FT said.
- The audit was conducted with an "inadequate" approach to revenue recognition, meaning the "the risk of an undetected material misstatement was unacceptably high." The FRC also had concerns over how BDO tested payment processes.
- Crypto trading accounts for up to 10% of Revolut's annual revenue, which was 261 million British pounds ($300 million) in 2020.
- Its application to be licensed by the Financial Conduct Authority (FCA) remains unresolved, with the firm able to offer crypto services through the FCA's Temporary Registration Regime.
- Revolut had not responded to CoinDesk's request for comment at press time. BDO declined to comment.
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
:format(webp)/www.coindesk.com/resizer/Wsw21Z13uYNeMwlEy09fcHX_LHw=/arc-photo-coindesk/arc2-prod/public/Z2G3HHMTVJGWRAQIH4UHCT3FEY.jpg)
Jamie Crawley is a CoinDesk news reporter based in London.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.
Jamie Crawley is a CoinDesk news reporter based in London.
:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/CYCX7LWKRBGI5DCLKHHYJIL52E.jpg)
:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/7LDC7D5IS5DBPL4N6UTVLA4SXM.jpg)
:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/PJTR3KRDWJCRVE3QREM6KUOK7A.png)
:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/3LWYGWIABFELHGBEOVTO3DR75M.jpg)