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What changed? FRC brings action in Autonomy scandal

Tom Fox | June 10, 2018

The long and sordid saga of the Hewlett-Packard (HP) acquisition of U.K. company Autonomy continues to percolate in new ways. Last month, U.K. regulator the Financial Reporting Council (FRC) announced it was filing formal complaints against the auditing work done by Deloitte and two former finance executives from Autonomy, Richard Knights and Nigel Mercer, over their failure to adequately challenge multiple issues with the firm’s accounts, specifically on the sale of hardware and its treatment under reseller contracts. 

For those who may not recall, HP bought Autonomy for just over $11 billion in 2011. Within 18 months, however, HP claimed it had uncovered a massive accounting fraud, which led to an over-evaluation of Autonomy by HP. HP then wrote off approximately $8.8 billion of the value of Autonomy and brought suit against Mike Lynch, the former CEO of Autonomy, and Sushovan Hussain, former CFO of the firm claiming fraud. The U.K. Serious Fraud Office investigated the HP...

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