Hewlett-Packard completed the purchase of customer and data management software company Autonomy for $11.1 billion in October 2011. Just over a year later, the computer giant devalued the purchase by $8.8 billion, and alleged that the owners of the UK-based Autonomy used "accounting improprieties" to seriously misrepresent the company's actual worth. Now, thanks to an audit of Autonomy's 2010 and 2011 financial results performed by Ernst & Young, HP says it has significant evidence that the British company reported unrealistic revenue and profit values prior to its purchase.

Autonomy's financials had been audited prior to its purchase by external firm Deloitte, who found no irregularities. But HP says the more recent audit drastically lowered Autonomy's revenue and profit results for 2010 and 2011. The revised figures show that the company's revenue for the year, a reported £175.6 million ($286.8 million), was actually £81.3 million ($132.7 million). Autonomy's profits, stated at £105.7 million ($172.6 million) in 2010, were slashed to £19.6 million ($32 million) in the new statements. HP reportedly found similar discrepancies in Autonomy's 2011 financials, but has yet to refile the paperwork.

Autonomy's former heads continue to deny the allegations

HP has filed for a £38.4 million ($62.7 million) tax rebate to return charges it paid in 2009 and 2010 that it says were incorrectly inflated by overstated profits, but the British tax office, Her Majesty's Revenue and Customs, has yet to offer the money. In the meantime, Autonomy's accounts are being investigated by the Financial Reporting Council in the United Kingdom, and the Justice Department in the United States. The Wall Street Journal says HP has also provided information to the US Securities and Exchange Commission and the UK Serious Fraud Office. Autonomy's former heads, including founder Mike Lynch, continue to deny HP's allegations.