Accounting Standards

FRC sets Deloitte Autonomy tribunal for October

A hearing of the Disciplinary Tribunal of the Financial Reporting Council (FRC) has been set for 10 October in relation Deloitte and two of the firm’s audit engagement partners concerning UK software firm Autonomy Corporation.

The formal complaint concerns the conduct of Deloitte, and its partners Richard Knights and Nigel Mercer, in relation to the audit of the financial statements for Autonomy Corporation plc for the financial years ended 31 December 2009 and 2010, and in relation to the review of the financial results for Autonomy Corporation for the periods ended 30 September 2009, 31 March 2010, 30 June 2010, 30 September 2010, 31 March 2011 and 30 June 2011.

It is alleged that the conduct of Deloitte, Knights and Mercer fell “significantly short” of the standards reasonably to be expected of a member or member firm of the ICAEW.

The FRC complaint alleges that the firm and its partners failed to challenge Autonomy’s accounting and disclosure of its purchases and sales of computer hardware and to correct “misleading communications” made by Autonomy to the FRC’s Financial Reporting Review Panel (FRRP).

Autonomy was acquired by Hewelett-Packard in a £8.8bn deal in 2011.

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