Deloitte Denies Knowledge Of Wrongdoing In Hewlett-Packard Probe

Deloitte Denies Knowledge Of Wrongdoing In Hewlett-Packard Probe
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This morning, a spokesperson from Deloitte has spoken up about the investigation into Hewlett-Packard Company (NYSE:HPQ)’s $10 billion acquisition of British software firm Autonomy Corp. The accounting firm says the last audit it performed on Autonomy’s books was for the year ending Dec. 31, 2010, and it says it performed that audit without knowledge about any misrepresentations from Autonomy. Deloitte’s statement follows a statement from Hewlett-Packard Company (NYSE:HPQ) that Autonomy misrepresented its finances before HP’s 2011 purchase of the company.

Deloitte Denies Knowledge Of Wrongdoing In Hewlett-Packard Probe

Hewlett-Packard Company (NYSE:HPQ) management learned about the alleged fraud at the software firm when one of Autonomy’s finance executives alerted them to documentation that supposedly indicates that there was fraud in the firm’s books in the years before HP acquired it. Now, the FBI and securities regulators in both the U.S. and the U.K. are looking into the claims.

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Deloitte served as auditor for Autonomy for years. The statement from the accounting firm indicated that it was not hired to do due diligence on the financial information provided by Autonomy to Hewlett-Packard Company (NYSE:HPQ). A spokesperson from the firm said that it had no knowledge of accounting improprieties at Autonomy and adds, “We conducted our audit work in full compliance with regulation and professional standards.” Deloitte said it would cooperate with the ongoing investigations.

Hewlett-Packard Company (NYSE:HPQ) executives say Autonomy sold some hardware that it logged as software, thus inflating some of its profit margins. They accuse the firm of $5 billion in accounting improprieties. However, DealBook reports this morning that some experts in the field of accounting, including former SEC chief accountant Lynn E. Turner, are wondering how HP’s claims are possible. Several experts say that the numbers just don’t make sense.

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