Big Four auditor EY will conduct an independent review of the financial processes and controls after New York investment fund Quintessential Capital Management (QCM) said it was ‘deeply sceptical’ about the validity of Darktrace’s financial statements.

The FTSE 250 company said EY would provide an ‘additional independent third-party review of its key financial processes and controls’.

QCM alleged that ‘questionable and aggressive marketing, including its accounting practices, were employed by Darktrace to drive up the value of the company’.

In a 70-page report, The dark side of Darktrace, QCM alleged that the tech company’s accounts contained ‘serious accounting red flags’ and held questionable practices to ensure revenue growth rates, such as so-called ‘channel stuffing’ to maintain a positive image to investors.

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