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Joe Fake

on 30 April 2010

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Transcript of Xerox

The 6 Billion Dollar Scandel Document Service Industry $6.4 Billion in LEGAL
Revenue last year 130,000 Employees Operate Out of
New York City Overveiw of
Corperation Merchandise Company The Scandel ... April 11th, 2002
Xerox was accused of Many accounting frauds over the previous 5 years
Largest scandel being Xerox imporperly classifying revenue

Also lease computers to companies OVERVEIW METHODOLOGY
& IMPROPIETIES When signing a lease agreement, Xerox was recording the revenue as a "sale"
Instead, Xerox should of been recording revenue noteably over the entire length of the contract
So at the time revenue was recognized, it was not valid
Xerox's restatement only changed what year the revenue was stated
Gaap Breach - Breaks the Revenue regocnition Princible WHO WAS EFFECTED This way it looked as if they had made a sale but really they had only made a lease and they were earning their revenue way earlier than they should have HOW THEY GOT AWAY WITH IT .... Inside... upper management - who were getting bonuses based on revenue
Stockholders/investors - people on the inside who held onto equity because they saw the value rise due to the increase in revenues Outside... Investors - who were buying stocks based on untrue revenue and profit values
The Firm... xerox had to pay a 10 million dollar fine and redo all their financial statements from 1997 to 2000
PREVENTION METHODS create and strengthen accounting rules
increase penalties for similar offences
Policies committing presidents or third party regulators to sign off on all transactions Bibliography Pratley, Nils. "Xerox $2bn Scandal".Guardian UK June 29, 2002: "Xerox Accounting Scandal". Corporate Narc. April 25, 2010 <http://www.corporatenarc.com/xeroxscandal.php>.
"Xerox the latest Wall St scandal". CNN. April 25, 2002 <http://archives.cnn.com/2002/BUSINESS/06/28/xerox/index.html>. "Xerox duplicates problems ". CNN Money. April 25, 2010 <http://money.cnn.com/2002/06/28/news/companies/xerox/index.htm>.
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