By Stefania Spezzati
LONDON (Reuters) -Revolut Ltd's auditor BDO LLP was not able to independently verify three-quarters of the 636 million pounds ($765 million) of revenue reported by the fintech firm in its long-delayed 2021 accounts.
The accounts were signed off this week after months of delays, following a revamp of Revolut's internal accounting systems and heavy regulatory scrutiny.
In Revolut's annual report, BDO was quoted as saying that the financial statements gave a "true and fair view of the state of the group", although it warned that some information may be "materially misstated".
It flagged concerns that verification procedures were not able to "provide sufficient appropriate assurance" over 477 million 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.
A spokesperson for BDO declined to comment further.
A spokesperson for Revolut told Reuters that the bank's overall revenue figure "was not in question" and BDO's concerns were "remedied in 2021".
"There is not any doubt over the completeness of the balance sheet, which, in turn, logically means that total revenue is also correct," said Chief Financial Officer Mikko Salovaara.
Revolut made its first full-year profit in 2021, of 26 million pounds after a 2020 loss of 223 million pounds, as total revenue nearly tripled helped by a boom in cryptocurrency trading, a key part of the group's business.
Revenue jumped again by 33% last year to more than 850 million pounds on the back of payments, subscriptions and business accounts, said Salovaara, despite a downturn in crypto, which made up around 5%-10% of total income.
The company replaced its internal accounting systems after the Financial Reporting Council, a UK body responsible for regulating auditors, said Revolut's audit for 2020 was "inadequate" and that "the risk of an undetected material misstatement was unacceptably high".
Salovaara declined to say whether the company was profitable in 2022. It expects to publish annual accounts by June, although it could take longer, retaining BDO for the audit.
SELF-SUSTAINED
Revolut was valued at around $33 billion in its last funding round in 2021, making it then Britain's most valuable start-up. Since its 2015 debut, it has raised about $1.7 billion from SoftBank and others.
Salovaara, who joined Revolut in 2021 from investment firm 3G Capital, said that the company does not plan to fundraise soon.
"We are self-sustained," he said. The firm will "eventually be a public listed business, but it’s not a priority".
Revolut applied for a UK banking licence two years ago.
"We are at the very final stage of the process," the CFO said adding that the relationships with the regulators have been "reasonable".
Revolut is likely to opt for an "authorisation with restriction", a person close to the matter told Reuters in January. This imposes certain limits on the business.