Question
12-44. PROFESSIONAL SKEPTICISM FRAUD HP LO 2,3,6,8,9In 2012, HP announced an impairment charge of $8.8 billion related to its 2011 acquisition of Autonomy. More than
12-44.
PROFESSIONAL SKEPTICISM
FRAUD
HPLO 2,3,6,8,9In 2012, HP announced an impairment charge of $8.8 billion related to its 2011 acquisition of Autonomy. More than $5 billion of the impairment charge related to accounting improprieties, misrepresentation, and disclosure failures discovered by an internal investigation by HP, and a forensic review into Autonomy's accounting practices prior to its acquisition by HP. Research this case so that you can answer the following questions:
- What are some examples of the accounting improprieties and misrepresentations made by Autonomy?
- Consider the fraud triangle. Which factor was most likely the most relevant to the financial statement fraud?
- For the 10 quarters prior to the acquisition, compare Autonomy's reported revenues with analyst expectations. How might a skeptical auditor respond to these comparisons?
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Financial Accounting with International Financial Reporting Standards
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
4th edition
1119504309, 1-119-50340-8, 9781119503408 , 978-1119504306
