Watchdog will probe accounts for Autonomy

Marion Dakers
THE ACCOUNTING watchdog has opened a probe into former FTSE 100 software firm Autonomy’s accounts for the years leading up to its controversial takeover by Hewlett-Packard.

The Financial Reporting Council said yesterday it will look at Autonomy’s reporting between

1 January 2009 and 30 June 2011, shortly before the $11.1bn (£7bn) offer from HP was revealed.

HP later blamed the firm for an $8.8bn writedown, claiming that Autonomy’s management had inflated the value of the company.

The US tech giant said in December that the US Department of Justice and the Serious Fraud Office were examining its claims of accounting impropriety.

Mike Lynch, founder and former chief executive of Autonomy, has strenuously denied HP’s claims.

A spokesperson for Autonomy’s former management yesterday welcomed the FRC investigation, saying it would be the first independent third-party scrutiny of HP’s allegations.

“As a member of the FTSE 100 the accounts of Autonomy have previously been reviewed by the FRC... and no actions or changes were recommended or required.

“We are fully confident in the financial reporting of the company and look forward to the opportunity to demonstrate this to the FRC.”

The FRC did not say whether it was examining Autonomy, or its auditor Deloitte, or both. It has opened the probe after consulting with professional body the ICAEW, and has the power to impose fines or ban individuals from acting as directors.

Deloitte said yesterday it would co-operate fully with the investigation, repeating that it had “no knowledge of any accounting improprieties or misrepresentations in Autonomy’s financial statements”.