Yet more fraud: when will these accountants ever learn?

Industry news roundup: week ended 6 Feb 2014

Nowadays it seems you can’t go a week without hearing about how the reputation of yet another accountancy firm has gone up in smoke – or in one case up a nose!

Does that not make sense yet? Well it will after you hear the story of accountant Steven Mason, who embezzled in excess of £180,000 from the estates of the deceased. What did Mr Mason do with his ill-gotten gains? Well, he fed his cocaine addiction, according to his own admission.

Ironically he had been employed by the firm he swindled in order to develop anti-fraud policies for them. Well, he was caught and the book was thrown at him, serving two years in jail. Now he’s back in the limelight as he was pulled back into court to face prosecution under the Proceeds of Crime Act, which is designed to relieve criminals of their ill-gotten gains, but the clueless bastard squandered so much of the money he stole that the courts had no choice but to fine him a single pound.

However, the man’s not out of the woods – he’s on the hook for some £174,000 and if he ever starts building up assets the court has access to them. Let this be a lesson to you: don’t muck about with money belonging to dead people!

Speaking of long-term problems that keep developing, the accounting row between UK software firm Audonomy and computer manufacturer Hewlett-Packard has intensified. HP bought Autonomy a few years back for some $11 billion only to discover that Autonomy overstated the value of their firm; the year following the purchase, Autonomy was found to have only been worth $8.8 billion – and $5 billion of that was directly related to accounting errors that might have been completely purposeful, though for Autonomy’s part they deny any wrongdoing of course.

Well now HP has struck another blow against Autonomy by downgrading the subsidiary’s pre-purchase performance as well. Originally, the company’s 2010 figures were some £175.6 million in sales with £105.7 million in profit, but now after HP did some digging new figures have been published that show only £81.3 million in sales… and less than £20 million in profit!

This is most definitely more than a shot across the bow in the fight between HP and Autonomy, and things aren’t looking good for the smaller firm. It looks very much like their accounting audits were just simply incorrect, and this means that HP could very well prevail.

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