Accounting Scandal (Xerox) Essay

943 Words Feb 2nd, 2014 4 Pages
Ms. Hardgrove
Financial Accounting
5 November 2013
Xerox’s Accounting Scandal
Xerox Corporation is a multinational American document management corporation which sells and produces a wide variety of color and black-and-white printers, multifunction systems, photo copiers, scanners, fax, digital production printing presses, and related consulting services and supplies. Overall any type of printing equipment, more specifically office equipment. It is currently headquartered in Norwalk, Connecticut since 2007 when it moved from Stamford, Connecticut. Even though its largest population of employees is based around Rochester, New York, (city in which the company was founded). One of the company’s major steps in the last decade has been the
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Allaire and G. Richard Thoman, and its former chief financial officer, Barry D. Romeril. The other individuals were: Philip D. Fishbach, who was a former Controller until his retirement from Xerox in April 2000, Daniel S. Marchibroda; former Assistant Controller until January 2000; and Gregory B. Tayler, former Director of Accounting Policy (1997-1999), Assistant Treasurer (1999-2000) and Controller (2000- 2001).
The SEC's complaint alleges that this six executives were involved in a fraudulent scheme that took place from 1997 to 2000 and misled investors about Xerox's earnings to keep its perfect reputation on Wall Street, in other words to meet their performance expectations and eventually to rise up the company's stock price. These results that resulted from rising company stock prices, also benefited the defendants when they personally sale the stocks, it benefited them because of the higher prices and also higher compensation. The scheme involved the use of accounting devices that were not disclosed to investors, many violating generally accepted accounting principles (GAAP). The complaint states that the defendants' illegal conduct was responsible for speeding up the recognition of equipment revenues by approximately $3 billion and that it increased pre-tax earnings by approximately $1.4 billion in Xerox's financial results for the years 1997-2000.
According to the complaint statement issued by the SEC "Xerox's senior management…

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