Xerox Financial Fraud Case Analysis Essay

The Business Record Certification Statement (Exhibit C-10) was provided to show that the EBT transactions the OIG used to create their analysis were complete and unaltered as shown in the Xerox database. The ALJ finds that these documents show how the OIG determined an average

Throughout history and in our own time, legitimate accounting methods have been utilized to fraudulently engage in manipulating activities that results in illicit gains to the perpetrators and losses to individuals and financial institutions.

In this case, there are several conspirators who is involved in the fraud receiving punishment from either SEC or federal government. Robert Levin, the AMRE executive and major stockholder, and Dennie D.Brown, the company’s chief accounting officer, were subject to the punishment in the form of a huge amount of fine by the SEC and the federal government. This punishment came from reasons. After AMRE going public, the company have the obligation to publish its financial reports but its performance did not meet expectation. The investigation by SEC shows that Robert took the first step of this scam, fearing the sharp drop of AMRE’s stock price because of the poor performance of company. He abetted Brown, to practice three main schemes to present a false appearance of profitable and pleasant financial reports. Firstly, they instructed Walter W.Richardson, the company’s vice president of data processing, to enter fictitious unset leads in the lead bank and they originally deferred the advertising cost mutiplying “cost per lead” and “unset leads” amount, so that they deferred a portion of its advertising costs in an asset account. The capitalizing of advertising expenses allowed them to inflate the net income for the first quarter of fiscal 1988. Secondly, at the end of the third and fourth quarters of fiscal 1988, they added fictitious inventory to AMRE’s ending inventory records, and prepared bogus inventory count sheets for the auditors. Thirdly, they overstated the percentage

Phar-Mor Inc. fell prey to greed from the top. Unfortunately, the auditing firm assisted the organization with the conspiracy to defraud the users of financial reporting, the government, and the stakeholders. The chief officers used the funds for personal usage and appropriated funds to functions that were not related to the organization business. The financial statements were riddled with material misstatements and fraud acts of theft were blatant. For example, the senior financial officers including the CEO grossly over stated inventory to hide losses.

(3) 1984-1987: As a public company, overstating income to help insiders dump stock at inflated prices using a variety of fraudulent

There where accounts that had the same debit and credit amounts just a few days apart. At the end of the last quarter in 2009, there were 22 sales recorded. At the end of the previous quarters there was not a high amount of sales which leads one to think that the sales were booked at the end of the year to make the company meet their goal. There was also a high number of invoices with no bill of landing. With a high number of no bill of landings, false billing is presumed. With a bill of landing of a lesser weigh than that which was invoiced, leads to the full order not being shipped, and over charging of the customer or that special arrangements have been made with the customer to receive a discount for early billing. There was also 5 times where invoices where invoiced before they were shipped. This leds to the fact that sales where most likely

We live in a world where, because of the Internet and the Web, we can communicate with someone in Africa or Asia as easily as we can communicate with someone in the office next door. A company like Xerox represents businesses all over the world, and the diversity of its employees is a big plus. Acknowledging our differences and

The issue of revenue recognition practices is an area that has received a lot of attention from regulators. Whenever there is a report of financial restatements or negative earnings, regulators pay extra attention to review the financial statements in order to verify that that there are not any indications of financial fraud or that the organization overstepped their boundaries in the area of managed earnings. The reason that regulators have taken a special interest in financial accounting and potential fraud is due to the collapses of companies such as Enron, WorldCom and Tyco. Regulators and those in the accounting profession are focusing their efforts on the causes of fraud as well as the steps that can be taken to effectively detect

The Company was a manufacturer of computer hard disk drives (Financial Executives Research Foundation, 2015) based in Longmont Colorado in 1989. The CEO, CFO and other members of management sought to defraud by managing earnings of the Company with fraudulent inventory, receivables and journal entries. The executives and management created boxes of inventory with bricks and scraps of metal for the auditors

This research paper will explore the fraud at Tyco and focus primarily on accounting and auditing issues related to the fraud. One thing worth noting about this case is that fraudulent financial reporting was not at the core of the fraud, which was the case with majority other big frauds at the time, such as Enron and Waste Management. On the contrary, fraud consisted of misappropriation of assets, and fraudulent financial reporting came as a consequence of trying to hide misappropriation of assets and the use of corporate money for personal benefit.

A number of financial statement frauds went undetected from auditors in past and attracted a high profile attention. The businessmen add fake assets or transfer the assets of companies to their personal assets and result in accounting scandals when the affected companies are bankrupted or are even close of bankruptcy. Just to mention a few names, accounting scandals of Enron, AOL Time Warner and Xerox are among the hottest accounting scandals of the century. This means that despite presence of professional auditors accounting scandals happen and there is a need to learn from the mistakes of the auditors who overlooked these activities. In this report the case study of Xerox is analyzed in detail to highlight violations of accounting principles and present an example from which lessons can be learnt for the future.

Figure four illustrates four main steps that can be used to detect fraud or earning manipulation in the company’s financial data.

executives were accused of overstating revenue from software licenses in collusion with executives from PurchasePro Inc.AOL sold the software licenses for PurchasePro. The parties were accused of deceptive accounting practices that resulted in investors believing that the sales projections of PurchasePro had been met when they had not and the result was that the stock prices of PurchasePro were inflated and overstated by 37% in the first quarter of 2001. Out of court settlements were reached by AOL and executives including a $210 million fine in order to avoid being criminally and civilly prosecuted. The defendants in this case who did not accept plea agreements were found to be 'not guilty' and this is stated to be due to the lack of documentation of what had occurred on AOL's networking and computer systems.

Major advantage with this option is the fact that Xerox operates in the market it fully knows, dominates and controls. As a market leader, having gained clear edge over main competitor IBM, Xerox can consolidate its position with the introduction of innovative new product "Book-In-Time solution" that could significantly reduce the publishing costs.

Accounting anomalies result from unusual processes or procedures in the accounting system. Several accounting anomalies are a result of fraudulent transactions. The three common accounting anomaly fraud symptoms involve problems with source documents, faulty journal entries, and inaccuracies in ledgers. In most cases poor accounting records are indications or symptoms of fraud rather than mere errors. With time being spent on fraud scheme it could be difficult to keep a proper accounting record or record transaction properly to cover up the fraud.