Question 1 - 9 marks (1,500 words)

The CEO has forwarded to you an interesting article and requires you to provide her with a deeper theoretical understanding of the issues discussed so that she can fully engage in the lively discourse at an upcoming conference.

You are required to find a newspaper article or web page report of an item of accounting news, i.e. it refers to a current event, consideration, comment or decision that has been published after the 1st of January 2018. Your article could also come from one of the professional journals. The article should not come from an academic journal. Academic journals generally do not contain news articles or articles of less than one page and are usually only published 2 or 4 times a year. If you are having a problem ensuring that your article is from an appropriate source contact your subject coordinator.

You then need to explain the article that you have found in your own words and clearly relate the concepts, ideas and facts within the article to one or more of the theories or topics that you have studied this session. Support your analysis of the assumptions and implications of the topic or theory as appropriate with reference to sources in APA 6 style. For example, this article from the Sydney Morning Herald in April 2016 could be linked to the topics of accounting regulation and measurement (and perhaps others). You must provide a copy of the article or web page, with details of the source, date and page number with your answer.

For answer Additional information, following is the news article and it should clearly relate the concepts, ideas and facts within the article to one or more of the theories such as Conceptual framework to accounting, financial accounting theory, the regulation of financial accountig or measurement issues or possitive or normative theory. Support your analysis of the assumptions and implications of the topic or theory as appropriate with reference to sources in APA 6 style.

by Joel Rosenblatt

The former chief financial officer of Autonomy Corp was found guilty of orchestrating an accounting fraud to arrive at the $US10.3 billion price Hewlett-Packard paid for the UK software maker more than six years ago.

A jury voted to convict Sushovan Hussain on Monday on all 16 counts of wire and securities fraud after three days of deliberations in San Francisco federal court.

Autonomy was the UK's second-largest software business when Hewlett-Packard acquired it in 2011. Hewlett-Packard later wrote down its value by $US8.8 billion, citing fraud by Autonomy and asking the US Justice Department to investigate.

The guilty verdict at least partially vindicates Hewlett-Packard. It also gives the company momentum as it heads toward a trial next year in London in a $US5 billion civil suit against Hussain and Autonomy co-founder and former chief executive officer Mike Lynch.

John Keker, Hussain's lawyer, declined to comment. Robert Leach and Adam Reeves, the lead US prosecutors, also declined to comment.

The US accused Hussain of spinning his company's financials to create a false appearance of growth.

At trial the government presented emails, phone records, earnings statements, press releases, and even an alleged payment of "hush money" to show what prosecutor Adam Reeves called "a balance sheet of fraud".

'Ponzi scheme'

From 2009 to 2011, when most technology companies were struggling in the wake of the 2008 financial crisis, Hussain built a facade to "eek out consensus estimates" of Autonomy's revenue before the merger with Hewlett-Packard, Reeves said in his closing argument.

Autonomy by late 2011 had become an "unsustainable Ponzi scheme", he said, leading Hussain to exhort Lynch to sell the company. Hussain was "desperate", and "constantly anguishing, and looking for revenue", Reeves said.

Keker, Hussain's lawyer, argued that HP bought, and then hobbled, an increasingly profitable software company. It was one of a string of failed acquisitions requiring write-offs, a list that includes Palm, Compaq, and Electronic Data Systems, he said.

Keker described a Hewlett-Packard "machine" that deployed an army of company lawyers and consultants to support the government prosecution, which he said relies on false testimony from cooperating witnesses who buckled under "tremendous pressure".

"They're trying to make this Englishman into a criminal, when committing a crime was the furthest thing from his mind when he was working," Keker said, referring to Hussain during his closing argument. "Everybody gets a pass but he's supposed to be a criminal. This case belongs in a civil case in London where it already is."

This case is U.S. v. Hussain, 16-cr-00462, U.S. District Court, Northern District of California (San Francisco).