LONDON - British accounting regulators said Monday that they would investigate the financial reporting at the British software maker Autonomy before its $11.1 billion acquisition by Hewlett-Packard in 2011.
The announcement follows accusations from H.P. that Autonomy inflated its sales and carried out improper accounting practices that misled the American technology giant ahead of the multibillion-dollar takeover.
In November, H.P. took a charge of $8.8 billion after it wrote down the acquisition of the British software maker. The figure included around $5 billion related to what it said were accounting and disclosure abuses at Autonomy.
Following investigations begun by American authorities, including the Justice Department, Financial Reporting Council, the British accounting watchdog, said it also would examine Autonomy’s finacial accounts from the beginning of 2009 to the middle of 2011.
The investigation may take around a year to reach disciplinary proceedings if wrongdoing is discovered, according to a spokeswoman for the Financial Reporting Council.
Mike Lynch, the founder of Autonomy who has denied the allegations of accounting misconduct brought by H.P., said he welcomed the investigation by the British regulator.
“We are fully confident in the financial reporting of the company and look forward to the opportunity to demonstrate this to the F.R.C.,†he said in a statement on behalf of the former management team of Autonomy.
