Xerox Corp. Scam

|ACCOUNTING FRAUD AT XEROX                                                                                                                     |
|Research on Accounting Fraud   at Xerox Company                                                                                                 |
|Ahu Atay                                                                                                                                       |


This analysis will examine the Xerox accounting fraud scandal, its causes and effects, and the need for best practices in business ethics, corporate governance and oversight. Xerox utilized ‘creative accounting’ techniques to misrepresent its assets and liabilities, deceiving investors and inflating its stock. The scandal was staggering in its scope and scale: chairman and CEO Allaire and others enriched themselves to the tune of millions at stockholders’ expense (Mills, 2003, pp. 21, 30). The Xerox scandal demonstrates the need for accountability and ethics in corporate governance and finance: Xerox’s central problem was its inept, short-sighted and unethical senior executives.

Xerox Corporation   is a global document management company which manufactures and sells a range of color and black-and-white printers, multifunction systems, photo copiers, digital production printing presses, and related consulting services and supplies. Xerox established itself as the purveyor of its xerography machines, establishing the company name in the common lexicon. Its Palo Alto Research Center (PARC) invented such hallmarks of digital age technology as “the personal computer, graphical user interface [mouse], Ethernet, and laser printer…” (Daft, 2009, p. 4). But the high profit margins of Xerox’s copiers blinded management to the potential of this technological cornucopia—which other companies rushed to exploit. By 1982, Xerox was facing drastically-reduced market shares as companies such as Canon began out-competing it in the...