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Revolut CFO quits after auditor BDO warning

standard.co.uk

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Re: Revolut CFO quits after auditor BDO warning

#41

Post by jsmith99 »

rahimnathwani wrote: post #36

The article says: “There is not any doubt over the completeness of the balance sheet, which, in turn, logically means that total revenue is also correct,” he[0] said. By my reading, this directly contradicts the statement of the auditors, published on Revolut's web site[1]: As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the completeness and occurr…

When auditors talk about the Other Information they mean the front half of the annual report and accounts i.e. the annual report rather the actual financial statements.

Re: Revolut CFO quits after auditor BDO warning

#42

Post by manquer »

tzs wrote: post #38
rchaud wrote: post #23

Earlier quoted context omitted.

If you're providing financial services in a heaivily regulated industry, it's not that big of a leap. The company has a pending application for a UK banking license for the past 28 months; the turnaround time for that in the UK is 12 months. Yet even now, they have filed their accounts several months late, and without a clean bill of health from the auditor. The CFO of all people should have advised withdrawal of the…

> The company has a pending application for a UK banking license for the past 28 months; the turnaround time for that in the UK is 12 months Wow...I'm a bit surprised. We've had a pending application for VAT registration in the UK since sometime in the 1st quarter of 2019. I had assumed that if a government is so short of resources that they can't manage to process applications to collect taxes for them, they would p…

4 years seems very high for VAT registration?

I have worked with some corrupt and incompetently bureaucratic global south governments even they wouldn’t take 4 years for a thing like VAT something is terribly wrong with UK.

Re: Revolut CFO quits after auditor BDO warning

#43

Post by manquer »

bhouston wrote: post #13
ceejayoz wrote: post #8

Earlier quoted context omitted.

Isn't figuring that out the point of investigating?

I am not sure you can start a crime investigation until there is an accusation of a crime. A failing audit isn’t enough. Financial oversight groups should start an investigation but it probably shouldn’t be called criminal at this point. Just an oversight issue where they demand more info.

Accusation by whom ? Who would have standing to accuse before investigating?

Enforcement bodies start investigation for any reason and none, (see all the stuff FBI did during civil rights movement for example ) at best legal framework used is probable cause

Re: Revolut CFO quits after auditor BDO warning

#45

Post by dogma1138 »

riffraff wrote: post #29
pavlov wrote: post #21

So did “fintech” just mean “shitty bank” all along, same way that crypto was just shitty penny stocks.

Revolut has had a fee questionable moments already, this does not seem to have been the case for other European fintech operations (wise, klarna, n26 etc). So yeah, I think a lot of fintech is not particularly good, but I don't think we can generalize to the level of the crypto boom.

The FCA (UK regulator) is also refusing to issue them a banking license, even a challenger bank one. It is still operating under their Lithuanian banking license.

I really don’t understand why so many people in the UK use it as the deposits are not FSCS protected so if something goes wrong you’re fuck out of luck.

Re: Revolut CFO quits after auditor BDO warning

#46

Post by rahimnathwani »

jsmith99 wrote: post #41
rahimnathwani wrote: post #36

The article says: “There is not any doubt over the completeness of the balance sheet, which, in turn, logically means that total revenue is also correct,” he[0] said. By my reading, this directly contradicts the statement of the auditors, published on Revolut's web site[1]: As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the completeness and occurr…

When auditors talk about the Other Information they mean the front half of the annual report and accounts i.e. the annual report rather the actual financial statements.

Yes, but:

1. The part I quoted suggest that any statement by management about revenue-related balances may be unreliable.

2. The 'Basis for qualified opinion', which does refer to the financial statements is clear that they were unable to verify almost 500MM GBP of revenue.

  ... we were unable to satisfy ourselves by the execution of such procedures or by alternative means concerning the completeness and occurrence of revenue within these streams totalling £476,856k which is included in the Statement of Comprehensive Income and Note 6 of the financial statements for the year ended 31 December 2021. Consequently, we were unable to determine whether any
adjustments to this amount or related amounts were necessary.

Regarding #2, if these numbers turn out to be incorrect, then it's extremely unlikely that the income statement could be adjusted without the balance sheet also being adjusted. The income statement reflects changes in the balance sheet over time. If the changes turn out to be wrong, then there are three possibilities:

A) The most recent balance sheet is wrong.

B) The previous balance sheet was wrong.

C) Both (A) and (B).

Re: Revolut CFO quits after auditor BDO warning

#47

Post by rchaud »

pavlov wrote: post #21

So did “fintech” just mean “shitty bank” all along, same way that crypto was just shitty penny stocks.

Fintech just means your valuation is based on how long you can expect to get away with ignoring checks and balances. You're no longer pre-revenue, just pre-regulation.

Re: Revolut CFO quits after auditor BDO warning

#48

Post by rchaud »

exizt88 wrote: post #27
rchaud wrote: post #23

Earlier quoted context omitted.

If you're providing financial services in a heaivily regulated industry, it's not that big of a leap. The company has a pending application for a UK banking license for the past 28 months; the turnaround time for that in the UK is 12 months. Yet even now, they have filed their accounts several months late, and without a clean bill of health from the auditor. The CFO of all people should have advised withdrawal of the…

I don’t know if average turnaround time applies here, because Revolut is getting a license on top of an already huge business. But again, all of what you said indicates that Revolut has fucked up. But it doesn’t mean they are doing WireCard levels of fraud, or any fraud at all.

Then it was an extremely stupid move to rack up a large number of UK customer accounts if you know it will make the licensing process more onerous, and delay the introuction of financial product that are dependent on the license.

Let's be real, they set up shop in Lithuania first because it was an easy way to enter the then-EU member UK market. Their offices are based in London because they weren't going to get unicorn valuations sitting in Vilnius.

Re: Revolut CFO quits after auditor BDO warning

#49

Post by zx8080 »

silisili wrote: post #24
heavenlyblue wrote: post #22

Earlier quoted context omitted.

Why did the executive have customer's phone number?

The article seemed to imply the customer had been texting complaints directly to the executive, not that the executive just cold texted a customer a weird threat.

It's hard to believe a normal person would death-threat some random contact instead of blocking.

Re: Revolut CFO quits after auditor BDO warning

#50

Post by zx8080 »

bboygravity wrote: post #33
riffraff wrote: post #29

Earlier quoted context omitted.

Revolut has had a fee questionable moments already, this does not seem to have been the case for other European fintech operations (wise, klarna, n26 etc). So yeah, I think a lot of fintech is not particularly good, but I don't think we can generalize to the level of the crypto boom.

You might want to try the search term "N26 locking customer accounts for no reason with no recourse".

Why do they do it? Is it a reaction on regulator critique, or a plain "let's lock this account up to take some money" dumb (or smart?) profit-generation?
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