Bloomberg News

Deloitte Found No Errors in Autonomy Books Before HP Deal

November 21, 2012

Deloitte LLC said that it didn’t find any evidence of improper accounting methods or misrepresentations when it last looked at Autonomy Corp.’s finances before Hewlett-Packard Co. (HPQ:US) bought the software company.

The denial comes after Hewlett-Packard Chief Executive Officer Meg Whitman yesterday said the company had relied on financial statements audited by Deloitte to make the decision to buy Autonomy for $10.3 billion last year. Whitman accused Autonomy’s former management team of inflating the company’s financial value ahead of the acquisition, contributing to an $8.8 billion writedown.

Deloitte, which said it wasn’t employed to do due diligence on the deal, last audited Autonomy’s finances for the year ended Dec. 31, 2010, the firm said today in an e-mailed statement.

“Deloitte categorically denies that it had any knowledge of any accounting improprieties or misrepresentations in Autonomy’s financial statements,” the company said. “We conducted our audit work in full compliance with regulation and professional standards.”

Deloitte said that it couldn’t comment further on the audit work because of client confidentiality and that it intends to cooperate with any investigations. Hewlett-Packard’s due diligence was overseen by KPMG, Barclays and Perella Weinberg, former Autonomy CEO Mike Lynch said in a statement yesterday. Lynch said he was “shocked” and “flatly rejects” the allegations of impropriety.

Hewlett-Packard began investigating Autonomy’s finances after a senior executive at Autonomy came forward following the May departure of founder Lynch, the company said. Hewlett- Packard has referred the matter to U.S. and U.K. securities regulators and will also pursue civil litigation.

“The board relied on audited financials -- audited by Deloitte -- not Brand X accounting firm but Deloitte,” Whitman said yesterday on a conference call with investors.

To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net


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