Autonomy accounting errors in financial report revisions

Former Autonomy CEO Mike Lynch has denied HP's claims of accounting fraud

Hewlett-Packard has revised financial reports for its Autonomy division after the company said that an audit turned up a number of serious accounting errors.

The restatements were revealed in U.K. regulatory filings made on Jan. 31.

HP bought U.K.-based Autonomy in 2011 but subsequently said that an internal investigation had found Autonomy was "substantially overvalued" at the time of the acquisition due to alleged accounting fraud. HP later took an US$8.8 billion write-down on Autonomy based in part on the alleged fraud.

The company has been sparring with former Autonomy CEO Mike Lynch, who has denied HP's claims. Lynch couldn't immediately be reached for comment on Monday.

"These restatements, and the reasons for them, are consistent with HP's previous disclosures regarding accounting improprieties in Autonomy's pre-acquisition financials," HP spokesman Michael Thacker said via email on Monday. "The substantial work necessary to prepare these accounts has revealed extensive accounting errors and misrepresentations in the previously issued 2010 audited financial statements, including the problems previously identified by HP."

For example, the 2010 financial results for Autonomy Systems Limited, a major division of the business, were revised to show a 54 percent decrease in revenue and 81 percent drop in operating profit, according to HP.

Given the "volume and magnitude" of the accounting errors, "it is possible that further errors may remain undetected," according to one of the U.K. regulatory filings.

The U.K. Serious Fraud Office and U.S. Department of Justice have both opened investigations into the Autonomy deal, which was brokered during the short and rocky tenure of former HP CEO Leo Apotheker.

His successor, Meg Whitman, has said Autonomy's information management and search software will play a significant role in HP's growth strategy.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuessoftwareHewlett-Packardfinancial resultspersonnelAutonomySEC Filings

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?