Kidney branded Horan's claim that Ireland feigned injuries during the historic 15-6 victory over the Wallabies as "incredulous and slightly scandalous".
Adding to the sense of grievance in the Irish camp is the allegation that it was Alan Gaffney, Ireland's back coach and a fellow Australian, who passed on the information.
Horan, who won 80 caps for Australia between 1989-2000, was writing in his column in an Australian newspaper.
"Ireland had a deliberate plan to fake injuries each time there was a breakdown in play so they could slow the game down and frustrate the Wallabies," said Horan.
"How can I be sure? By talking to Irish assistant coach Alan Gaffney in the dressing rooms afterwards."
Kidney insisted Horan's account had been fabricated and questioned his integrity.
"What I can tell your for definite is that the reporter in question (Horan) was never in the dressing room," said Kidney.
"The coach in question (Gaffney) never spoke to him, so I'll let you make your own inferences on how he feels he can quote something that was never said.
"It's incredulous and slightly scandalous that he'd try to bring one of his fellow countrymen into something that is totally untrue.
"It's for other people to have their standards in life.
"It's important that if we get something wrong, we hold up our hand.
"When we don't get something wrong we'll defend ourselves and we wouldn't be shy in doing so."
Horan heavily criticised referee Bryce Lawrence and stated he should not oversee another match at the World Cup, but conceded that "Ireland deserved to win and always would have won".
However, his suggestion that Lawrence "destroyed the spectacle of the game" failed to paint the winning performance in a positive light.
The view taken by Horan, an all-time legend of the game, will only fuel the sentiment that Ireland have not been given the respect they deserve for a stunning victory.
Though lacking in tries, the defeat of the Tri-Nations champions and World Cup second favourites was captivating throughout and exposed Australia's shortcomings up-front in dramatic fashion.
Ireland's next assignment may lack the lustre of a high-profile showdown with the Wallabies, but Kidney insists Russia will be treated with equal respect.
The Pool C rivals meet at Rotorua International Stadium on Sunday, 6am kick off BST, and Kidney is refusing to take comfort from Russia's 53-17 thumping by Italy earlier in the week.
"If we win 3-0 I'll be happy. If we're capable of beating Australia, we're also capable of losing to Russia," he said.
"We've had enough experience by now to know that at World Cups there are no easy matches.
"Italy picked up a few early scores that knocked Russia back, but once Russia got themselves into it, it was a different game.
"Russia scored three tries against Italy the other night, we only scored two against them in February.
"If you enter any of these matches half-cocked, it's going to be a miserable night. That's happened to us before.
"If we get the approach right, then we have the ability to get a result, but I'm not thinking that we'll be running away with it."
Ireland have made nine changes and one positional switch for their third and penultimate group game.
Leo Cullen leads a side that consists of a mixture of seasoned internationals and squad players.
Among the new faces is Ulster centre Paddy Wallace, who will be making his first start and only second appearance at a World Cup despite having travelled to the last three tournaments.
"There's an awful lot that goes on behind the scenes and there is a lot of generosity from some guys," said Kidney.
"The easy job is being in the XV, the hard part is when you're not in it.
"What Paddy has contributed would be an example to every young player coming through of how to give to a squad without wanting for yourself.
"That's always the way he's been and he's approached his role probably way better than I'd be able to.
"He's as disappointed as any player when left out, but he always takes time out, thinks about it and then supports the team.
"I'm sure he will grab this opportunity with both hands."
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