Xerox Accounting Scandal
2001, Mexico
Creative accounting - Recognized equipment rentals as sales
Hiring Independent investigator?
Q1 : Xerox increased sales by recognizing rentals as equipment sales. Why does this increase revenue in the current period?
Equipment Rentals / Sales
Example
Total $600 5 year Rental Contract
.
.
Exposed Receivables
Is?
Account receiva
Xerox does not own that equipment any more as its lease asset nor does provide any goods or services with it. However, in reality, Xeroxis providing rental services each month. These manipulations had the effect of accelerating Xerox's recognition of revenue at the expense of future periods
3. What are “exposed receivables?”
Exposed receivables are account receivables that have become u
Xerox does not own that equipment any more as its lease asset nor does provide any goods or services with it. However, in reality, Xeroxis providing rental services each month. These manipulations had the effect of accelerating Xerox's recognition of revenue at the expense of future periods
3. What are “exposed receivables?”
Exposed receivables are account receivables that have become u
Contingency
Force Majeure
Performance Measures
Anticipate Change
Xerox “Satisfaction at the Low End and Dropping”
2000 Employees Transferred to EDS / 700 Remain
After 2.5 Years 15% of Proprietary System Replaced (Global View)
600 Novell LANs installed
1000’s Desktops and Printers Replaced
12 Person Xerox Team Established to Manage
Contract Amended in Sept 1996
Whatis ‘Six Sigma’ ?
Six Sigma means a measure of quality that strives for near perfection. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities.
Six Sigma is the management reform movement for 21th centuries in an information-oriented society that could apply for all process.
Six Sigma in LG Electronics
The cause of importation 6sigma