Xerox to re-state revenue after improper accounting claim
US office equipment company Xerox said today it expected a revenue restatement of around $2 billion over the five year period between 1997 and 2001.
The statement comes in the wake of a report in the Wall Street Journal which says the company improperly accelerated far more revenue during the past five years than the US Securities and Exchange Commission (SEC) estimated in an April settlement with the company.
But the audit, which also looked at 2001, has found fresh accounting problems and now the total amount of improperly recorded revenue over that five-year period could be more than $6 billion.
Shares in Xerox plunged 31 per cent in Europe today as a result of the news. Xerox traded at $5.51 via the Instinet electronic brokerage system, down from New York's $8 closing yesterday.
A spokeswoman for the company said today: "Xerox expects its revenues to be restated by around $2 billion over the five year period."
She said she could not comment further on allegations the total amount of improperly recorded revenues could be more than $6 billion. Xerox is soon expected to file restated sales and earnings for the 1997 to 2000 period.
The company is busy restating its 2001 accounts according to a new methodology.
Xerox, which employs 1,600 people in Dundalk and 1,000 in Dublin, agreed in April to pay a $10 million civil penalty for financial reporting violations, while not admitting or denying fraud. This is the largest penalty paid by any US company in an accounting case.