On November 20, 2012, Hewlett-Packard (HP) disclosed that it discovered an accounting fraud and has written down $8.8 billion of the value of Autonomy, the British software company that it bought in 2011 for $11.1 billion, after discovering that Autonomy misrepresented its finances. In May 2012, HP had fired former Autonomy CEO, Dr. Michael Lynch, citing poor performance by his unit.

Provide a brief discussion of the auditor liabilities and the potential defenses.

What duties of care, laws, or responsibilities to clients were violated?

What are the potential defenses available to the accountants and auditors involved in the situation?

Answer rating: 100% (QA)

Auditor liabilities The auditor can be held negligent in conducting the Autonomys audit In other wor... View the full answer