Xerox Financial Fraud Case Analysis
Financial Research Xerox Financial Fraud Case Analysis
This paper was prepared for Auditing Procedures
Financial Research – The Xerox Abstract On April 8th, 2002, the Xerox Corporation ("Xerox") announced its willingness to accept the U.S. Securities and Exchange Commission (SEC) to reach a settlement with the conditions. Thereafter, its financial fraud became surfaced. On June 28th, Xerox Corporation in accordance with the requirements of the settlement, submitted the unaudited 1997-2000 restated annual financial statements to the SEC, and recognized fraud interest income of $6.4 billion, pre-tax profit of $1.4 billion (SEC thought that should be $1.5 billion) during this period, which sparked …show more content…
And Xerox to prepare their own violation of reserve mainly relies on the following measures: “manipulation of tax revenue” and “amortize ready”. In short, the accounting techniques used by Xerox violated the generally accepted accounting principles (GAAP). Revenues were inaccurately assigned to time periods in which they were not yet received, which resulted in inflated revenues, and also provided investors with inaccurate information pertaining to the company’s income/assets. It was reported that management was aware of and even approved these accounting methods. 3. Other ways of accounting operations: a. Randomly increase the rental equipment’s net residual value b. Raise the rental prices and leasing renewal period c. In advance to confirm the revenue of contract regards rental income portfolio return d. To approve the account receivables with discounting business.
Financial Research – The Xerox Fraud consequence analysis: 1. Self-influence: directly results to Xerox’s bankruptcy. Since 1906, Xerox has kept a steady growth and for decades, Xerox created so many myths, it has been called as "copiers of
the King", or a veteran of 500 companies within the nation, or "the most reliable 50 enterprises." But in the later of 90’s, Xerox’s technology began to fall behind and eventually squeezed in the United States and descended from the first chair, lost 1/3 of the market, coupled with short-term maturity of the bonds, cash debt, with a