VerSe Innovation’s FY24 Financial Statement Receives Clean Audit Opinion From Deloitte

Despite these identified weaknesses, Deloitte clarified in its audit report that the issues do not affect its overall opinion on VerSe Innovation’s consolidated financial statements

VerSe Innovation has raised over $2 billion in funding since its inception

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VerSe Innovation cofounder Umang Bedi said on Monday that the financials are true and fair with a clean report. “The controls within the company were identified as weak by Deloitte, however, it is confirmed that these control weaknesses have no impact on the company’s consolidated financial statements,” Bedi told Inc42.  

The statement came in the wake of concerns raised by Deloitte, the auditor for VerSe Innovation, over internal control deficiencies for the financial year ending March 31, 2024. The audit firm identified “material weaknesses” that could potentially result in misstatements related to key accounting areas such as operating expenses, trade payables, and expense account balances. These findings were disclosed in the company’s FY24 financial statements, despite VerSe being an unlisted entity.

In a filing with the Registrar of Companies, the audit firm noted that VerSe Innovation lacked adequate internal controls across several key financial processes, including supplier selection and evaluation, purchase order and invoice approvals, and payment authorisations.

VerSe Innovation, parent company of Dailyhunt and Josh, has raised over $2 billion in funding since its inception. The company counts prominent investors such as the Canada Pension Plan Investment Board (CPPIB), Ontario Teachers' Pension Plan, James Murdoch’s Lupa Systems, and Z47 (formerly Matrix Partners) among its backers. Its most recent fundraising round, led by CPPIB in 2022, brought in $805 million and valued the company at nearly $5 billion.

The auditor noted that VerSe Innovation did not have adequate internal controls in place to ensure the completeness of expense provisions at each reporting period.

Working To Strengthen Its Internal Processes

In response, the company stated it is actively working to strengthen its internal processes. VerSe said it has initiated a “detailed workshop on best practices and checklists,” which will be implemented across all relevant teams. Additionally, the company plans to establish a comprehensive “order-to-cash” framework that will formalise procedures for supplier selection, approvals, invoicing, and payments, in line with its Delegation of Authority (DOA) policy.

Despite these identified weaknesses, Deloitte clarified in its audit report that the issues do not affect its overall opinion on VerSe Innovation’s consolidated financial statements.

In a statement, VerSe said, "Deloitte, VerSe Innovation’s long-term auditor, has issued a true and fair view of our FY24 consolidated financial statements, providing a clean audit opinion on our financials. While Deloitte identified certain internal control weaknesses, their report has clearly confirmed that these do not impact their opinion on the consolidated financial statements, which is true and fair".

The auditor clarified that, although it issued an adverse opinion on VerSe’s internal controls, it provided an unqualified opinion on the accuracy of the company’s financial statements.