DELOITTE HAS DEFENDED its audit of Autonomy following allegations of accounting misrepresentations and improprieties by management at the UK technology company.
Hewlett Packard announced it planned to write off more than $5bn (£3.1bn) from its acquisition of Autonomy, which was audited by Deloitte, due to accounting misrepresentations and improprieties it alleges were committed by senior Autonomy management.
However, a spokesman for Deloitte said: "Deloitte categorically denies that it had any knowledge of any accounting improprieties or misrepresentations in Autonomy's financial statements. We conducted our audit work in full compliance with regulation and professional standards. 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.
"Deloitte UK was auditor to Autonomy at the time of its acquisition by HP. Deloitte's most recent audit opinion on Autonomy's financial statements was for the year ended 31 December 2010 and was signed in February 2011."
In a call to analysts yesterday, HP CEO Meg Whitman (pictured) said the HP board relied heavily on the financial data audited by Deloitte and, in a due diligence exercise, brought in KPMG to audit Deloitte's work.
Hewlett Packard has referred the matter to the US Securities and Exchange Commission's enforcement division and the UK's Serious Fraud Office.
As someone who used to work in audit this does not surprise me if the allegations prove to be true.
Junior staff with limited knowledge of the business tend to do most of the audit work and they usually have severe time constraints placed on them therefore limiting the work they can undertake.
If any problems are found by the partners they are usually keen to overlook them when the audit client asks them whether they want to keep the audit in future years.
The whole system is a joke!
Posted by: James Bottom, 22 Nov 2012 | 12:40
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