HP Was Told Beforehand That Autonomy’s Accounting Practices Were Faulty

Hewlett Packard took an $8.8 billion charge for their 2011 acquisition of Autonomy Corp.back in November.  HP accused Autonomy CEO Mike Lynch of fraud and even considered filing a lawsuit against him.  Some new details about the acquisition have emerged according to The Wall Street Journal.  The WSJ reports that HP executives had learned about some accusations against Autonomy beforehand, but decided to ignore them.

In a phone call with HP executives, outside auditors of Autonomy Corporation said that an executive there raised an allegation of improper accounting.  The HP executives did not end up passing this allegation to the company’s board of directors or the CEO.

Clearly at the time of the acquisition, HP’s executives, CEO, and board of directors had severe communication issues.  Every organization, large and small NEEDS to constantly communicate with each other about every issue especially when it comes to mergers and acquisitions.

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