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HP Investor Sues Everyone in Sight – Including KPMG and Deloitte
December 2, 2012
The Autonomy fiasco at HP is getting only more bizarre and convoluted. Now, in just the beginning of a barrage of lawsuits that will likely rain down upon HP and its advisers, Reuters reports that Philip Ricciardi, an HP shareholder since 2007 in Philip Ricciardi, derivatively on behalf of Hewlett-Packard Co, v. various defendants, U.S. District court for the Northern District of California, San Jose, No. 12-6003 has sued HP’s board, officers, and yes of course, the two auditors – Deloitte and KPMG of negligence
HP CEO Meg Whitman has been constantly saying that HP relied on Deloitte UK’s audit of Autonomy. And further, that HP also relied on KPMG’s audits of Deloitte’s work.
HP blamed $5 billion of the total of $8.8 billion write-down on “improper accounting” at Autonomy. HP shares are at a 10-year low.
And what are the Big Four saying, at least publicly:
Deloitte says that it was not responsible for due diligence on the Autonomy acquisition. And it totaly denied any knowledge of any accounting improprieties or misrepresentations in Autonomy’s financial statements (last audit opinion for the year ended December 2010.). “Deloitte categorically denies that it had any knowledge of any accounting improprieties or misrepresentations in Autonomy’s financial statements at the time of the write-down announcement,” according to a Deloitte spokesman. “We conducted our audit work in full compliance with regulation and professional standards.”
And then, KPMG says it was not engaged to do any audit work or oversee Deloitte’s audit. It also provided only limited services not related to Autonomy’s audit. KPMG stated, “We can say with confidence that we acted responsibly and with integrity.”
Who found these accounting improprities which led to the writedown? PwC.
E&Y folks must be feeling just a little safe to be out of this whole mess.