Revolut Reports First Annual Profit, But with Doubts Cast by BDO

03/30/2023 09:09 • Tech Trends • 94 views

According to reports, the long-delayed accounts of Revolut, a British digital bank, showed that the company achieved its first full year profit in 2021, but the audit firm BDO expressed doubts about these figures. Specifically, it stated in its accounts that it was unable to verify three quarters of the revenue reported by Revolut – $765 million – and warned that certain information could be “materially misstated.”.

The audit firm BDO suspects that there is a “significant misstatement” of the $765 million revenue in Revolut’s accounts

In 2021, Revolut, a British digital bank finally announced their first annual profit amidst long-delayed accounts. However, the audit firm BDO expressed serious doubts about the reported figures. Specifically, BDO stated in its accounts that it was unable to verify a staggering three quarters of the revenue reported by Revolut – which equates to $765 million – and warned that certain information could be “materially misstated.”
In this article, we will delve deeper into the situation surrounding Revolut’s reported profit, discussing the doubts cast by BDO and the implications of these doubts on the digital bank.

1. What is Revolut?

Before we jump into the topic at hand, it is important to provide some context. Revolut is a British fintech start-up founded in 2015. It offers a variety of financial services including currency exchange, cryptocurrency trading, and peer-to-peer payments.
Revolut is regarded as a somewhat disruptive entrant in the banking space, offering mobile banking functions, low-cost foreign exchange transfers, and budgeting and savings services. Typically, these are services that have been provided by traditional banks, but Revolut has been able to innovate and streamline the process.

2. Revolut Reports First Annual Profit

After years of losses, Revolut surprised the markets by reporting their first annual profit in 2021. The digital bank reported a pre-tax profit of £39 million ($53.6 million), up from a loss of £107 million ($146.7 million) in the year prior.
This milestone is incredibly significant for Revolut, as it takes the company one step closer to its goal of becoming a highly valued public company.

3. The Doubts Cast by BDO

Unfortunately, the good news was short-lived as the audit firm BDO expressed serious doubts concerning the reported figures. Specifically, BDO was unable to verify a significant portion of the revenue reported by Revolut, stating that three quarters of the revenue – equating to $765 million – could not be verified. Moreover, BDO warned that certain information released by Revolut could be “materially misstated.”
This news caused widespread concern due to the significant gap between revenue and a reputable auditor’s ability to verify them, potentially indicating the potential for financial misconduct at the digital bank.

4. Implications of the Doubts Cast by BDO

The doubts cast by BDO heightened regulatory scrutiny of Revolut, which is already facing credibility issues due to ongoing regulatory issues in various parts of the world. This could potentially lead to a significant impact on Revolut’s future growth plans and its overall reputation.
In addition, investors seemed to be spooked by the recent report, leading to a drop in Revolut’s share price. While the digital bank’s first annual profit is a great step forward, the doubts cast by BDO are a significant concern that should not be overlooked.

5. Conclusion:

Revolut recently reported their first annual profit after a series of years in the red. While this is undoubtedly a significant achievement, the doubts cast by BDO regarding the revenue reported by Revolut is a significant cause for concern. These uncertainties could potentially damage Revolut’s reputation and impact negatively on the company’s future growth plans.

6. FAQs:

Q1: What does Revolut do?

Revolut is a British fintech start-up that offers a variety of financial services including currency exchange, cryptocurrency trading, and peer-to-peer payments.

Q2: What is the significance of Revolut’s reported profit?

Revolut’s reported first annual profit is significant as it takes the company one step closer to its goal of becoming a highly valued public company.

Q3: What are the implications of the doubts cast by BDO?

The doubts cast by BDO could potentially damage Revolut’s reputation and impact negatively on the company’s future growth plans.

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