Tuesday, November 20, 2012

HP Writes Off Nearly $9 Billion Related to Accounting Fraud

Reports are coming out today that Hewlett Packard will take an $8.8 billion writeoff of an acquisition of a software company they purchased for $10 billion. The reason for the writeoff is because the company they acquired, Autonomy, deceived them by using a massive revenue recognition fraud. HP stated that they have turned over the case to the SEC and regulators in the UK. You can read a few more details on Forbes, MSNBC and elsewhere. It seems the reports are still a bit vague though...

According to this article in the WSJ, two of the Big Four, Deloitte and KPMG, were involved in the audit and purchase of Autonomy. Unfortunately, they will undoubtedly be dealing with this mess too.

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