Autonomy Accounting Errors Confirm HP Claims It Bought a Lemon

Tuesday, 04 Feb 2014 10:12 AM

By Michael Mullins

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink
Accounting errors at Autonomy, the U.K. software maker, were recently discovered in an audit that supports claims by Hewlett-Packard that the company had inflated its revenue and profit figures in its 2010 financial statement prior to its $11 billion sale in 2011.

In its audit, Ernst & Young reviewed Autonomy's 2010 and 2011 financial documents in which they found that the software company had overstated its 2010 revenue in part by 54 percent and its operating profit by 81 percent, CNN Money reported.

"These restatements, and the reasons for them, are consistent with HP’s previous disclosures regarding accounting improprieties in Autonomy’s pre-acquisition financials," HP spokesman Michael Thacker wrote in an email to PCWorld.com on Monday. "The substantial work necessary to prepare these accounts has revealed extensive accounting errors and misrepresentations in the previously issued 2010 audited financial statements, including the problems previously identified by HP."

Urgent: Do You Approve Or Disapprove of President Obama's Job Performance? Vote Now in Urgent Poll

HP's decision to purchase Autonomy, which specializes in database search, stemmed from an apparent desire to increase its reach into the Big Data realm and went down as one of the worst, if not the worst, decision Hewlett-Packard had made under the leadership of then CEO Leo Apotheker, CNN noted.

Anotheker was subsequently fired and replaced by Meg Whitman, who over her extensive business career served as an executive for the likes of eBay, DreamWorks, Procter & Gamble, Hasbro and several other major companies.

The decision to purchase Autonomy led to the company’s shares plunging in late 2012 to a 10-year low after Hewlett-Packard received an $8.8 billion writedown.

Reacting to the audit's findings, Autonomy co-founder Mike Lynch, who has since left the company, continued to deny any wrongdoing.

Editor's Note: ObamaCare Is Here. Are You Prepared?

Speaking through a spokesman on Monday, Lynch said the report does not prove fraud.

"The majority of this restatement seems to have nothing to do with the accounting dispute, but is rather HP moving things around," said Lynch's spokesman Chris Blundell.

HP is considering legal action against Lynch and others for the alleged fraud and in late January requested an additional six weeks from U.S. District Judge Charles Breyer to consider its legal options.

© 2014 Newsmax. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
[Error loading the WebPart '']
Value cannot be null. Parameter name: virtualPath
Send me more news as it happens.
 
 
Get me on The Wire
Send me more news as it happens.
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
You May Also Like

Brain-Dead Pregnant Woman: Ireland Court Rules Life Support Can End

Friday, 26 Dec 2014 16:53 PM

A pregnant woman in Ireland who is brain-dead will be taken off of life support after a court ruled that her 18-week-old . . .

Dustin Diamond Arrested for 'Reckless' Behavior in Bar Stabbing

Friday, 26 Dec 2014 16:13 PM

Actor Dustin Diamond - known as Screech on "Saved by the Bell" - was arrested in Wisconsin on Friday morning, charged wi . . .

Egypt Bans 'Exodus: Gods and Kings' Due to 'Historical Inaccuracies'

Friday, 26 Dec 2014 15:48 PM

Egypt has banned Hollywood's latest biblical movie, "Exodus: Gods and Kings," because of "historical inaccuracies." . . .

Top Stories

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved