PracticeConsultingXerox admits GAAP was ‘misapplied’

Xerox admits GAAP was 'misapplied'

US copier group Xerox yesterday denied carrying out 'fictitious transactions' to increase revenues but admitted that it had 'misapplied' GAAP accounting rules.

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

The SEC is continuing an investigation it began last summer into alleged accounting irregularities at the group’s Mexican subsidiary.

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

Paul Allaire, Xerox chairman and chief executive, moved to reassure shareholders by saying: ‘After rigorous reviews of Xerox’s accounting, no fictitious transactions were found and the company’s liquidity is not impacted.’

Former assistant treasurer James Bingham, who is suing Xerox for wrongful termination of his contract, originally brought allegations of financial reporting irregularities to the fore.

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Xerox chief rejects calls for new probe

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