Revolution Beauty has announced changes to its auditing system.
BDO, who had been the company’s auditor since 2019, resigned by mutual consent. The decision was made following a tender process overseen by Revolution Beauty’s audit committee, which resulted in the recommendation of MHA as the new auditor.
The changes are effective immediately and MHA will conduct a group audit for the financial year ending February 28, 2024.
BDO’s resignation took place without any circumstances that they felt should inform the company’s members or creditors. This statement was confirmed in a company announcement by Revolution Beauty, indicating that the transition between the two auditing firms has been smooth.
Background of resignation
BDO’s resignation as Revolution Beauty’s auditor comes following intense scrutiny of the beauty business. The company had not announced its full-year financial results for the year ending February 28, 2022, and as a result, the company was undergoing an audit by BDO.
An investigation revealed that co-founders Adam Minto and Tom Allsworth had made personal loans of around £1m to distributors and senior staff.
These arrangements were not disclosed to the company’s board of directors in a timely manner, raising serious concerns about the company’s financial transparency.
The investigation also uncovered problems with Revolution Beauty’s acquisition of pharmaceutical company Medichem. Following the investigation, Minto and Allsworth resigned and former interim COO Bob Holt and CFO Elizabeth Lake took over the reins.
Despite these challenges, Revolution Beauty has announced its determination to achieve sales of £1 billion by 2030 as part of its new resurgence strategy ‘Reigniting the Revolution’.
Regarding the appointment of MHA’s new auditor
Following BDO’s resignation, MHA has been added to oversee the audit of Revolution Beauty for the financial year ending February 28, 2024. MHA’s appointment comes at a critical time for the beauty brand, which is seeking to regain its footing after a series of financial and legal issues.
Revolution Beauty expresses confidence in MHA’s ability to provide the necessary oversight and guidance during this transition period.