Tuesday Feb 4 2014
HP bought the British firm Autonomy for $11 B in October 2011. The HP Audit alleges Autonomy booked revenue unlikely to be paid and claimed transactions for non existent customers. HP wrote down the acquisition by $8.8 billion a year later.
This demonstrates why we study accouinting why there are revenue recognition rules, and why audits are important as well as due diligence before buying another company.
Professor Elam 
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