Deloitte Faces Record £15 Million Fine For Audit Errors
The British financial reporting Council (FRC) is set to impose a record fine of £15 million (almost $19 million) on the consulting company Deloitte for "serious and repeated" errors during an audit of the software company Autonomy, according to the FT.
This decision was made by the FRC following a meeting of its disciplinary court, which concluded that Deloitte and two of its former partners-Richard knights and Nigel Mercer-failed to meet obligations affecting the public interest, and deliberately overstated financial indicators. The firm, part of the "big four" audit firms in the world, checked the accounts of Autonomy before its sale to Hewlett-Packard (HP) for almost $11 billion in 2011. A year later, $8.8 billion was written off from Autonomy's assets, 5 billion of which was attributed to "accounting violations."
In 2015, Hewlett-Packard filed a lawsuit in a London court against the founder of Autonomy, Michael Lynch, and the former chief financial officer of the company, Shushovan Hussain, demanding compensation for deliberate misrepresentations in financial statements for $5.1 billion. Three years later, Hussain was sentenced by a British court to 12 years in prison.