UK regulator to investigate Autonomy accounts

Out-Law News | 12 Feb 2013 | 5:20 pm |

A UK accountancy watchdog has announced that it has launched an investigation into the published accounts of Autonomy, the software provider that was bought over by Hewlett-Packard (HP) in 2011.

The Financial Reporting Council (FRC), which deals with disciplinary matters facing UK accountants in cases raising "important issues affecting the public interest", said the scope of its investigation would cover Autonomy's financial reporting between 1 January 2009 and 30 June 2011. The FRC said it had taken the decision to open its investigation after consulting with industry body the Institute of Chartered Accountants in England and Wales (ICAEW).

HP has previously claimed that it paid more money than it should have when it bought Autonomy in 2011 as a result of "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy". Dr Mike Lynch, Autonomy's former chief executive, has fervently denied the allegations. HP acquired Autonomy in a reported £7 billion deal.

Deloitte, which audited the Autonomy accounts during the period covered by the FRC's investigation, said that it would coordinate with the regulator.

"As previously stated, Deloitte had no knowledge of any accounting improprieties or misrepresentations in Autonomy's financial statements," the accountancy firm said, according to a report by the Guardian. "We conducted our audit work in full compliance with regulation and professional standards."

Details of a US regulator's probe into the allegations of accountancy irregularities relating to Autonomy emerged in late 2012. HP disclosed that the US Department of Justice was investigating the matter in a document submitted to the US Securities and Exchange Commission (SEC).