Friday 16 November 2018

Accountancy watchdog begins disciplinary action over Autonomy

Autonomy Corp was acquired by Hewlett Packard for 11 billion US dollars in 2011.

Autonomy Corporation was acquired by HP in 2011 (Tim Ireland/PA)
Autonomy Corporation was acquired by HP in 2011 (Tim Ireland/PA)

By Ravender Sembhy, Press Association City Editor

The accountancy watchdog has begun disciplinary proceedings against former bosses at Autonomy and auditors at Deloitte linked to alleged fraud at the software firm.

The Financial Reporting Council (FRC) said on Thursday that it is pointing the finger at former Autonomy finance chief Sushovan Hussain and ex-vice president of finance Stephen Chamberlain.

Mr Hussain is alleged to have acted dishonestly or recklessly when preparing and approving Autonomy’s annual report and accounts for the years ended 31 December 2009 and 31 December 2010.

Mr Chamberlain, meanwhile, is also alleged to have acted dishonestly or recklessly and failed to act with competence and due care when preparing Autonomy’s annual report and accounts in the same period.

Autonomy Corp was acquired by Hewlett Packard for 11 billion US dollars (£7.4 billion) in 2011.

But the deal quickly turned sour, with Hewlett Packard later writing off three-quarters of its value amid accusations of fraud at Autonomy.

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The FRC has also filed a formal complaint against Deloitte (Jonathan Brady/PA)

Earlier this month, Mr Hussain was convicted of fraud in the US.

The FRC has also filed a formal complaint against Deloitte relating to its audit of Autonomy.

Deloitte and two of its auditors, Richard Knights and Nigel Mercer, stand accused of failing to adequately challenge Autonomy’s accounting and disclosure of its purchases and sales of computer hardware, as well as host of other offences.

Mr Knights is also alleged to have breached the “fundamental principle of integrity in that he recklessly failed to correct a misleading statement” made by Mr Hussain.

Their conduct is alleged to have fallen “significantly short of the standards reasonably to be expected of a member or member firm of the ICAEW”, the FRC said.

The FRC’s investigation was carried out in parallel with criminal and civil investigations and litigation in the UK and the US.

A date for a tribunal hearing will be announced in due course, the FRC added.

A spokesman for Deloitte said: “Deloitte acknowledges today’s announcement from the FRC and has fully cooperated with the investigation to date.

“We are disappointed that these complaints have been brought and we will defend ourselves against them at Tribunal.”

Press Association

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