Xerox Accounting Scandal And Its Impact On The Situation

Auditing Group Assignment ATIF MANZOOR ASIFUL ISLAM PUSPITA GHOSH MEHADI HASAN Table of Contents Overview 3 Xerox as an organization 3 Xerox accounting scandal 3 Impact of accounting scandal 5 The violations 5 Effect of accounting scandal on share price and company overall 6 Role of auditor in Xerox scandal 6 Effect of auditor’s involvement impact the situation 6 Recent developments about the case 7 Lessons learned 7 References 8 Auditing Group Assignment Overview 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. Xerox as an organization Xerox is an American corporation having its headquarters currently in Norwalk Connecticut. The headquarters of the company moved fromShow MoreRelatedThe Xerox Corporation s History1633 Words   |  7 PagesIntroduction The Xerox Corporation’s history, however, is not perfect. In 2002, they were fined $10 million for inflating revenue and profits from 1997 to 2000 by including future payments on existing products (Xerox). They were using various â€Å"topside accounting devices,† to manipulate their equipment revenues and earnings (KPMG). They would record leases of products to customers as sales in order to increase their revenue. The auditing firm used by Xerox was KPMG. KPMG is a global accounting and auditingRead MoreCorporate Scandals That Rocked The Foundations Of The Business World Essay1418 Words   |  6 PagesWe have seen in recent corporate history a litany of corporate scandals that rocked the foundations of the business world. Huge corporations whose economic outputs are larger than most of the developing countries have suddenly imploded under the weight of stock manipulation, unscrupulous accounting procedures and deliberate enculturation of business competitiveness anchored on ‘doing whatever it takes to win’. Small ethical cracks in the business foundation had gone too many and had been widelyRead MoreWhy Is It Important for External Auditors to Be Independent? Relate Your Answer to the Primary Role of External Auditors. Give Examples of Specific Ways the Lack of Auditor Independence May Impact Adversely on an Audit.1648 Words   |  7 PagesName: Nguyen Thi Hong My Library card number: 33237972 Word count: 1304 words AcF 100 Introduction to Accounting and Finance Lent Term: Individual Coursework Essay Topic: Why is it important for external auditors to be independent? Relate your answer to the primary role of external auditors. Give examples of specific ways the lack of auditor independence may impact adversely on an audit. In 2001, there was an event that had shaken the whole business world. The crash of EnronRead MoreWhy Is It Important for External Auditors to Be Independent? Relate Your Answer to the Primary Role of External Auditors. Give Examples of Specific Ways the Lack of Auditor Independence May Impact Adversely on an Audit.1638 Words   |  7 PagesName: Nguyen Thi Hong My Library card number: 33237972 Word count: 1304 words AcF 100 Introduction to Accounting and Finance Lent Term: Individual Coursework Essay Topic: Why is it important for external auditors to be independent? Relate your answer to the primary role of external auditors. Give examples of specific ways the lack of auditor independence may impact adversely on an audit. In 2001, there was an event that had shaken the wholeRead MoreShareholder Value and Current Financial Crisis: An Analysis of the Relationship4354 Words   |  18 Pagesgood governance will definitely be thrown out of business for under-performing. Then why is there the need to formulate and execute certain benchmark of principles and policy intervention for good corporate governance[3]. But there are certain situations where competition can’t prevent mal-practices. There are cases where the managers get corrupt and embezzle shareholders’ profits. The product-competition threat has no bearing on such mal-practices. Hence a policy intervention is indeed justified[4]Read MoreFinancial Statement Frauds29904 Words   |  120 PagesAccounting and Finance Master Thesis No. 2002:53 Financial Statement Fraud - Recognition of Revenue and the Auditor’s Responsibility for Detecting Financial Statement Fraud - Tiina Intal and Linh Thuy Do Graduate Business School School of Economics and Commercial Law Gà ¶teborg University ISSN 1403-851X Printed by Elanders Novum Abstract Financial reporting frauds and earnings manipulation have attracted high profile attention recently. There have been several cases by businessesRead MoreWaste Management33554 Words   |  135 Pagesaccounting fraud and auditor legal liability c a S eS inc lu de d in t hiS Se ction 4 89 99 4.1 Enron Corporation and Andersen, LLP Analyzing the Fall of Two Giants . . . . . . . . . . . 4.2 Comptronix Corporation 4.3 Cendant Corporation . . . . . . . . . . . . . . . . . . . . . . Identifying Inherent Risk and Control Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . 111 119 127 137 Assessing the Control Environment and Evaluating Risk of Financial StatementRead MoreThe Ethical Code Of Ethics4083 Words   |  17 Pagescompany guards against errors and fraud, auditors are abiding by the rules and so on (Percy 2007). In light of ethical principle, we will discuss its role in audit failure in the last few decades showing the unexceptional high rate of accounting and audit scandal. The situation has turn into a basic issue in corporate America. A vast, freely exchanged partnership gets an unqualified audit report, and presently from that point falls with the news that the financial statements are terribly misquoted. In whatRead MoreThe Ethical Code Of Ethics4083 Words   |  17 Pagescompany guards against errors and fraud, auditors are abiding by the rules and so on (Percy 2007). In light of ethical principle, we will discuss its role in audit failure in the last few decades showing the unexceptional high rate of accounting and audit scandal. The situation has turn into a basic issue in corporate America. A vast, freely exchanged partnership gets an unqualified audit report, and presently from that point falls with the news that the financial statements are terribly misquoted. In whatRead MoreEssay on Ethics and Management Decision Making4729 Words   |  19 Pagesmoral decisions taken by business leaders. Enron’s story is only one example of corporate scandals and cases of bad moral decisions, which has not only shaken the public trust in corporations, but also affected the bank accounts of investors and employees. Before the bankruptcy of Enron; it was included in one of the fortune 500 companies after its fraudulent accounting case the share went down to $1 (Enron scandal, 2010; PBS, 2002; Godwin, 2006; Godwin, 2008). The â€Å"bad apples† which create fraudulent