UK Regulators Scrutinize Revolut After Finding Audit Flaws

Revolut is being pressured to improve its internal controls for financial reporting, after the U.K.’s Financial Reporting Council said the FinTech’s audits were flawed and had a high risk of “misstatement,” the Financial Times reported Monday (Sept. 5).

The payments group had several key personnel losses in its risk and compliance teams in the past few months.

“The auditors are being significantly more challenging now, because they’re getting beaten up by their regulators,” one of the unnamed sources told the Financial Times.

Another unnamed source said Revolut had to improve “unsexy things like its back office and controls” because it needs to have a bank-like culture rather than a tech firm culture.

Revolut is the unnamed “financial services provide” whose audit by BDO was criticized by the FRC in its last report, according to unnamed sources. The BDO audit suffered from an “inadequate” approach to revenue recognition, so there was more risk than usual of an undetected misstatement, the FRC said.

All of this comes as auditors are under pressure from the regulator to resist the demands from companies to sign off accounts on time if the necessary information hasn’t been provided.

In other news related to Revolut, it has also rebranded its service for 6- to 17-year-olds, previously called Revolut Junior, as Revolut <18, PYMNTS wrote.

Read more: Revolut Rebrands Service for Young People as Revolut <18

Revolut <18 is an account for young people that can be connected to their parent’s or guardian’s account, intended to help start them on learning about finance and budgeting money.

The app uses end-to-end security and card controls to let younger customers track their activity, get spending alerts and develop financial responsibility.

With the service, parents and guardians can set a regular “pay day” for pocket money and also add challenges for the children to complete to get the earnings.

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