- FRC filed a formal complaint against former Autonomy bosses Stephen Chamberlain and Sushovan Hussain
- Two of Deloitte’s auditors – Richard Knights and Nigel Mercer – also investigated
The UK’s accountancy watchdog has filed formal complaints against former bosses and auditors at software company Autonomy, just weeks after the firm’s former finance chief was convicted of fraud in the US.
The Financial Reporting Council said it had ‘delivered formal complaints… in connection with the conduct’ of the Autonomy’s former vice president of finance Stephen Chamberlain and ex finance chief Sushovan Hussain as well as auditors Deloitte.
Hussain was convicted of 16 counts of fraud separately brought against him by American prosecutors earlier this month, and he faces up to 25 years in jail.
Autonomy saga: HP has been accusing Autonomy’s former bosses of cooking the books
He is alleged to have acted dishonestly or recklessly when preparing and approving Autonomy’s annual report and accounts for 2009 and 2010 – before the company was sold to Hewlett Packard for $11billion (£7.4billion) in 2011.
After the deal, HP said it found accounting irregularities and was forced to write off three-quarters of its value. The US computer giant has accused Autonomy’s former bosses of cooking the books.
The FRC, which has been accused of ‘outrageous ineptness’ in its investigation into the accounts of Autonomy, has also filed a formal complaint against Deloitte relating to its audit of the software firm.
It said two of Deloitte’s auditors – Richard Knights and Nigel Mercer – failed to adequately challenge Autonomy’s accounting.
Knights is also alleged to have breached the ‘fundamental principle of integrity in that he recklessly failed to correct a misleading statement’ made by Hussain.
Their conduct is alleged to have fallen ‘significantly short of the standards reasonably to be expected of a member or member firm of the ICAEW’, the FRC said.
A spokesman for Deloitte said: ‘Deloitte acknowledges today’s announcement from the FRC and has fully cooperated with the investigation to date.
‘We are disappointed that these complaints have been brought and we will defend ourselves against them at Tribunal.’