Deloitte Issues Clean Audit Opinion To VerSe Innovation Despite Flagging Lapses
The auditor found many weaknesses with regards to internal control, but said that it did not change its evaluation of the company's financial statements.
Deloitte, who audited VerSe Innovation's standalone financial statements, issued a "true and fair" opinion on them for fiscal 2024.
The auditor found many weaknesses with regards to internal control, but said that it did not change its evaluation of the company's financial statements.
The audit report was issued after the recent resignation of VerSe's Chief Financial Officer Sandip Basu. Notably, VerSe Innovation operates content aggregator Dailyhunt and the short-form video app Josh.
Deloitte's audit identified significant weaknesses in VerSe Innovation's internal controls affecting several operational areas. The audit report highlighted deficiencies in supplier selection and vetting, purchase order and invoice approvals, and payment procedures. These control failures, according to the report, elevate the risk of substantial inaccuracies in expense records and trade payables, potentially leading to improper payments or fund misappropriation.
The audit also raised concerns regarding VerSe Innovation's management of virtual assets. Deficiencies were noted in customer onboarding processes, pricing controls, separation of duties, and user access management for digital asset transfers. These shortcomings could result in inaccuracies in the reported revenue and costs related to these assets.
The audit further indicated concerns about VerSe Innovation's accounting for advertisement revenues. Deloitte observed inconsistencies in the operational effectiveness of internal controls designed to ensure customer release orders. This increases the risk of misstated revenues and overstated trade receivables.
The audit report also detailed issues within VerSe Innovation's IT general controls. Deficiencies were identified in the management of user access rights, oversight of program modifications, and the implementation of change management procedures. Additionally, Deloitte noted the lack of adequate audit logs.
VerSe Innovation stated that it is actively working to improve its internal systems. The company intends to establish structured frameworks for supplier management, implement access control dashboards to enhance digital asset security, and refine its revenue recognition procedures.
