Professor Elam

Wednesday Nov 21 2012

Another reason to study accounting is to gain the ability to analyze a set of books, auditing or assurance it is called. Now HP claims it was duped. It paid just over $11 billion for the British software maker which just began in 1996. Now HP claims hardware sales were booked as software sales inflating the real sales numbers. At least three of the four international CPA firms are involved. Autonomy of course denies any wrong doing claiming HP mismanagement. It is hard to see how even badly manged HP could sink its own acquisition in one year.

The real lesson here is that it was foolish to acquire anything in an era of economic stagnation for an outsized price of $11 billion.