Autonomy’s Creative Accounting
January 18, 2013
Autonomy is the hot seat after HP discovered $5 billion worth of creative accounting. HP accused Autonomy of selling software-as-a-service contracts as licensing deals and, of course, the company has denied all allegations. The Department of Justice is currently investigating the claims. Business Insider sat down with one of Autonomy’s former employees to gain insight: “Exclusive: A Former Autonomy Salesperson Says This Is How The Creative Accounting Was Done.” Virginia Briody explained how:
“…Prior to HP’s acquisition, Autonomy executives massaged a SaaS deal into a big software licensing deal so they could recognize revenue up front, and show more growth than what the deal really was, a monthly agreement spanning four years. She says she has evidence – emails and documents.”
Briody is not unbiased, though, as she is currently in a legal battle with HP for unpaid compensation. Her story describes how Autonomy bought out a former company she worked for and inherited the Pioneer Investments contract. Autonomy did not gain all the pieces called for the original contract, so they changed the contract from a hosting to a software licensing deal. Autonomy did this to get the revenue up front. The mess gets even more bungled. It is interesting how contracts can be reworked to reflect dishonesty, if the allegations come out to be true. If so, woe to Autonomy and HP.
Whitney Grace, January 18, 2013
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