By Huw Jones

Deloitte should be fined a record 15 million pounds ($19 million) for "serious and serial failings" in its audit of technology company Autonomy, a lawyer for Britain's accounting watchdog told an independent tribunal on Thursday.

Deloitte, one of the world's Big Four auditors, and two of its partners, Richard Knights and Nigel Mercer, were investigated in relation to their audit of Autonomy's financial statements for 2009 and 2010.

Autonomy, founded by Mike Lynch, was bought for $11 billion by Hewlett Packard (HP) in 2011, but the deal turned sour a year later when HP wrote off three-quarters of the former FTSE 100 company's value, alleging it was deceived by its finances.

In a draft report, the tribunal - which will decide on any sanctions - found instances of recklessness, lack of objectivity, and a failure to discharge its public interest duty by Deloitte.

"The findings in the draft report seen cumulatively are the most serious findings ever made against an audit firm in a tribunal report or agreed by a firm with the FRC by way of settlement," Rebecca Sabben-Clare, barrister for the Financial Reporting Council (FRC), which regulates auditors, told an online hearing that set out the tribunal's findings.

Sabben-Clare said Deloitte should be fined 15 million pounds, which would be the FRC's highest fine, surpassing the 10 million pounds that PwC was fined in 2018 for its audit of retailer BHS, which later collapsed.

Deloitte said it acknowledged the seriousness of the findings of the tribunal, but that it was inappropriate to comment further on the two-day hearing at this stage.

Deloitte said its audit practices and procedures had evolved significantly since the work on Autonomy was performed over a decade ago.

"We are continuing to transform our audit by investing in firm-wide controls, technology and processes and have been vocal in our support for comprehensive reform," Deloitte said.

Knights and Mercer will not be commenting, Deloitte said.

(Reporting by Huw Jones; Editing by Mark Potter)