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UK accountancy watchdog FRC investigates Autonomy

Financial Reporting Council (FRC) in the UK is latest organisation to examine Autonomy accounts, which is accused of inflating its value

The UK’s Financial Reporting Council (FRC) is the latest organisation to examine the accounts of Autonomy, which is accused by the company that acquired it of inflating its value.

HP acquired Autonomy in 2011 for $11.7bn. In November 2012, HP said former managers at Autonomy had used “accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company” to boost its price before the acquisition went through.

HP wrote down the value of Autonomy by $8.8bn and referred the accused managers to the US Securities and Exchange Commission (SEC) and the UK Serious Fraud Office.

The FRC said it has “launched an investigation under the Accountancy Scheme into the published financial reporting of Autonomy for the period between 1 January 2009 and 30 June 2011.”

Last month Mike Lynch, Autonomy founder and former CEO said HP's allegations are false

“We do not understand why HP is raising these issues now, given that Autonomy reported into the HP Finance team from the day the acquisition completed in October 2011, there was an extensive due diligence process and Autonomy was audited as a public company for many years," Mike Lynch said.

 

 

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