Accounting Scandal: Xerox

Accounting Scandal: Xerox

Accounting Scandal: Xerox

Xerox Corporation is the world's leading supplier in the field of photocopy inks and supplies.

In 2002, Securities and Exchange submitted a complaint against Xerox. The complaint alleged that between 1997 and 2000, Xerox mislead the public by using a number of "exercises accounting”, the most important change when Xerox said rental income Copier - recognition of the "sale" in the period was the signing of the lease, and instead of recognizing revenue in the same proportions along contract.

The question was aroused with the recognition of revenue, and not with the validity of the sales. Xerox repeat only change the income for the year was reported. Recipes prior to 1997, has recognized the Xerox equipment rental, or lease, as required by the United States (GAAP).

(GAAP) prohibit the American companies to recognize all of the proceeds from the equipment sales unless some criteria are met, such as the ownership transfer. (Charles D. 2006).

Accused the SEC to change the way Xerox applied the principles of accounting did not violate only the generally accepted accounting principles, but was devised deliberately to mislead Wall Street believe that the management group worked perfectly, surpassing expectations on Wall Street near each quarter from 1997 to 1999. Accused the Supreme Education Council also accounting irregularities financial profits increased pre-tax 1997 from $405M, and profits of 1998 before taxes of $655M, and profits of 1999 before taxes of $511M (in every quarter of a year, revenues were increased sufficient to overcome the Wall Street earnings per share First Call). (Owen, D. 2004).

SEC also charged that Xerox's senior management knew, or by directing or accepting, and accounting procedures that have been taken for the purpose of administering the so-called "bridging the gap" to achieve the targets set for revenue and profits. When KPMG, Xerox's ...