Cybersecurity firm Darktrace recruits auditing firm to review its financial processes
Cybersecurity firm Darktrace said it has hired auditing firm EY to review its important financial processes and controls in an attempt to ensure confidence of investors after a short seller QCM accused the Darktrace of manipulation in its accounts.
Geoffrey Hurst, chair of the board said, “The Board believes fully in the robustness of Darktrace’s financial processes and controls. As a sign of that confidence, we have commissioned this independent third-party review by E&Y. We look forward to the outcome of this review.”
Darktrace said that EY will report to the chairperson of Darktrace’s audit and risk committee, i.e. Paul Harrison.
Darktrace shares increased more than 2% after the announcement of review by auditing firm.
The tools of Darktrace allow companies to fight cyberthreats with artificial intelligence. In the last month, Darktrace was targeted in a report by New York-based short seller Quintessential Capital Management, after investigating business model and selling practices of Darktrace.
QCM said it has found alleged discrepancies in Darktrace’s accounting, round-tripping, and channel stuffing practices that attempts to inflate revenue. The firm expressed deep skepticism about the validity of financial statements of Darktrace.
Darktrace denied the claims made by the QCM. The CEO of Darktrace, Poppy Gustafsson defended the firm by saying that these are unfounded inferences by QCM.
Poppy Gustafsson said, “We have robust processes in our business. I stand by my team and the business I represent.”