Hewlett-Packard disclosed on Monday that it had found what it said were serious accounting errors at Autonomy, the British software maker it acquired in 2011, leading to a number of major revisions in the acquired company’s previous financial reports.
Among the changes in the restatements were a 54 percent cut in the 2010 revenue of one major Autonomy subsidiary and an 81 percent cut in its operating profit for that year.
The disclosures, made in mandatory filings with the British government on Friday, are the latest development in a bitter dispute between H.P. and Autonomy’s founder and former chief executive, Mike Lynch. Late in 2012, H.P. took an $8.8 billion accounting charge tied to its takeover of the British company, adding that “serious accounting improprieties†represented about $5 billion of that write-down.
The American technology company has contended that Autonomy improperly booked hardware sales as higher-margin software sales in some instances and booked licensing revenue up front before receiving money, inflating gross profit margins.
H.P. has said that it has provided its findings to the Justice Department, the Securities and Exchange Commission and Britain’s Serious Fraud Office.
“The substantial work necessary to prepare these accounts has revealed extensive accounting errors and misrepresentations in the previously issued 2010 audited financial statements, including the problems previously identified by H.P.,†Michael Thacker, an H.P. spokesman, wrote in an emailed statement.
In its filings, H.P. warned that other accounting errors may yet emerge.
Mr. Lynch has denied H.P.’s charges and demanded that the American technology giant provide evidence to back up its claims.
A spokesman for the former senior management of Autonomy said on Monday, “We continue to reject these allegations by H.P. Given the size of H.P.’s write-down, we are very surprised by the small size of the adjustments in Autonomy Systems Limited that are attributed to the ongoing accounting dispute.â€
Revised Autonomy Systems Ltd. 2010 Financial Report
Revised Autonomy Corporation Ltd. 2010 Financial Report
