Case of overstating revenue


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One case of overstating revenue is alleged to have been carried out by the Xerox Corporation, a large US company and a leading player in the photocopying business. It is alleged that the company brought forward revenues in order to improve reported profits as its fortunes declined in the late 1990s. These revenues related to copier equipment sales, particularly in Latin America. To correct for the overstatement of revenues, Xerox had to restate its equipment sales revenue figures for a five-year period. The result was a reversal in reported revenues of a staggering $6.4bn, although $5.1bn was reallocated to other revenues as a result. This restatement was one of the largest in US corporate history. In June 2002 the company paid a fine of $10m but denied any wrongdoing.

 

 

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Accounting Standards: Case of overstating revenue
Reference No:- TGS02125132

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