UK accounting body begins investigation into Autonomy
The UK’s accounting watchdog has launched a rare investigation into the financial reports of Autonomy during the period leading to its $11 billion (€8.2 billion) acquisition by technology giant Hewlett-Packard in 2011.
The Financial Reporting Council (FRC), which sets British standards for accounting and auditing, said yesterday it had decided to investigate after consultation with the Institute of Chartered Accountants in England and Wales, which represents 140,000 chartered accountants.
The investigation will cover Autonomy’s accounts from January 1st, 2009, to June 30th, 2011, three months before the HP acquisition.
Autonomy was plunged into an accounting scandal in November after HP announced it was writing down $8.8 billion of the deal’s value and accused the British company’s former management of serious accounting improprieties.
Mike Lynch, the Irish-born former Autonomy chief executive who left HP in early 2012, has denied the allegations and accused HP of mismanaging his former company since the deal.
A spokesman for Mr Lynch said yesterday he welcomed the latest investigation as an opportunity to settle any doubts about Autonomy’s methods.
Mr Lynch issued the following statement on behalf of the Autonomy’s former management: “As a member of the FTSE 100, the accounts of Autonomy have previously been reviewed by the FRC, including during the period in question, and no actions or changes were recommended or required.
“Autonomy received unqualified audit reports throughout its life as a public company. This includes the period in question, during which Autonomy was audited by Deloitte. We are fully confident in the financial reporting of the company and look forward to the opportunity to demonstrate this to the FRC.”
The council describes itself as the disciplinary body for accountants and actuaries in the UK dealing with cases which raise important issues affecting the public interest.
Its investigations can result in disciplinary proceedings against the member firm or individual and, if so decided, referral to disciplinary tribunal.
HP revealed in December that it was co-operating with the US department of justice on an investigation into the Autonomy deal.
The company also faces at least 10 shareholder lawsuits related to the writedown. – Copyright The Financial Times Limited 2013