PracticeConsultingXerox hunts for new CFO

Xerox hunts for new CFO

Struggling US copier group Xerox is hunting for a new chief financial officer to replace Barry Romeril who has announced he will retire at the end of the year.

Romeril was formerly FD at British Telecommunications and chemical group ICI where he built up his reputation as a ‘cost cutter’ before being head hunted across the Atlantic and joining Xerox in 1993.

In the last two years he played a key role in steadying the ship after the company was rocked by accusations of accounting irregularities and financial problems.

The news of Romeril’s decision comes just days after the company announced it had replaced its auditor’s KPMG with PricewaterhouseCoopers in a filing with the SEC.

Xerox chairman Paul Allaire said in a statement that it was ‘appropriate at this time to bring in new accountants’ adding that the company expected a ‘smooth and seamless transition’ to PwC.

Wall Street analysts have previously said the financial crisis at the company was over, but on Friday a Salomon Smith Barney analyst told Reuters the switch would have ‘negative ramifications for the shares near term, as investors once again attempt to gain comfort that accounting issues are largely behind the company.’

In June Xerox denied carrying out ‘fictitious transactions’ to increase revenues but admitted that it had ‘misapplied’ GAAP accounting rules.

The account adjustments reduced the group’s net loss for 2000 by $127m Pounds 85m) to $257m (Pounds 173m), and cut shareholder equity and tangible net worth. The full-year loss per share was 44 cents, instead of 63 cents reported in January.

KPMG had originally held up publication of Xerox’s annual report. But the Big Five firm went on to approve the restated financial statements after further investigations into documents sent to US watchdog the Securities and Exchange Commission.

At the same time the SEC is continuing an investigation which began last summer into alleged accounting irregularities at the group’s Mexican subsidiary.

Xerox chief executive Anne Mulcahy praised Romeril for ‘spearheading’ efforts to restore the company to financial health.

Prior to his announcement, Romeril said the outsourcing of Xerox’s manufacturing operations was ‘evidence of the company’s improved liquidity’.

Links

Xerox admits GAAP was ‘misapplied’

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