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Deloitte Denies Knowledge of Autonomy Fraud, Rejects HP Accusations

By Michael Foster, Big4.com Blogger

 

Deloitte has publicly denied that it knew there was fraudulent activity at Autonomy plc.

Hewlett-Packard, Autonomy’s parent company, accused the British-based software firm of misrepresenting its core business before the U.S. computer giant acquired the firm. Hp’s CEO Meg Whitman said that her firm decided to acquire the firm as a result of Deloitte’s audits, which she suggests were unreliable and did not uncover underlying fraud. “The board relied on audited financials–audited by Deloitte–not Brand X accounting firm but Deloitte,” Whitman told investors on Monday.

Deloitte has stated that it knew nothing about fraud at Autonomy, whose auditor it had been for years before the acquisition. Deloitte’s last audit of the firm was in February 2011. “Deloitte categorically denies that it had any knowledge of any accounting misrepresentations in Autonomy’s financial statements,” the firm said in a public statement. Deloitte also added that it was not hired “to provide any due diligence in relation to the acquisitino of Autonomy,” although the firm was the auditor of the firm when HP acquired it.

The statement does not discuss details about the transactions Whitman highlighted to investors. “We are unable to discuss our audit work further due to client confidentiality. We will cooperate with the relevant authorities with any investigations into these allegations,” the statement said.

3 Responses to Deloitte Denies Knowledge of Autonomy Fraud, Rejects HP Accusations


  1. B Reid says:

    Deloitte denied knowledge in very similar circumstances when McKesson purchased a software company “HBOC” in approx. 1998. Seems they didn’t learn any lessons…


  2. Jagdish Kothari says:

    I am amazed that Deloitte were totally oblivious of such flagrant false accounting of revenues. There were lots of analysts reports which raised doubts about Autonomy’s revenues and profit margins. And yet Deloitte were totally unconcerned about such warnings!! Were they really being diligent?


  3. Daryl Tanner says:

    Deloitte’s “Due Diligence” usually only extends to making sure the check for their audit invoice was signed.