Xerox Corporation is a planetary papers direction company which manufactures and sells a scope of colour and black-and-white pressmans, multifunction systems, exposure duplicators, digital production printing imperativenesss, and related consulting services and supplies.
Xerox is headquartered in Norwalk, Connecticut, though its largest population of employees is based in and around Rochester, New York, the country in which the company was founded.
History:
The Xerox 914 was the first one-piece field paper photocopier, and sold in the 1000s.
Xerox was founded in 1906 in Rochester, New York as “ The Haloid Company ” , which originally manufactured photographic paper and equipment. The company later changed its name to “ Haloid Xerox ” in 1958 and so merely “ Xerox ” in 1961. The company came to prominence in 1959 with the debut of the first field paper photocopier utilizing the procedure of xerography ( electrophotography ) developed by Chester Carlson, the Xerox 914. The 914 was so popular that by the terminal of 1961, Xerox had about $ 60 million in gross. By 1965, grosss leaped to over $ 500 million. Before let go ofing the 914, Xerox had besides introduced the first xerographic pressman, the “ Copyflo ” in 1955.
The company expanded well throughout the sixtiess, doing millionaires of some enduring investors who had nursed the company through the slow research and development stage of the merchandise. In 1960, the “ Wilson Center for Research and Technology ” was opened in Webster, New York, a research installation for xerography. In 1961, the company changed its name to “ Photocopy Corporation ” . Xerox common stock ( XRX ) was listed on the New York Stock Exchange in 1961 and on the Chicago Stock Exchange in 1990.
In 1963, Xerox introduced the Xerox 813, the first desktop plain-paper duplicator, conveying Carlson ‘s vision of a duplicator that could suit on anyone ‘s office desk into a world. Ten old ages subsequently in 1973, a colour duplicator followed.
The optical maser pressman was invented in 1969 by Xerox research worker Gary Starkweather by modifying a Xerox duplicator. This development resulted in the first commercially available optical maser pressman, the Xerox 9700, being launched in 1977. Laser publishing finally became a multi billion dollar concern for Xerox.
In 1970, under company president Charles Peter McColough, Xerox opened the Xerox PARC ( Xerox Palo Alto Research Center ) research installation. The installation developed many modern calculating engineerings such as the mouse and the graphical user interface ( GUI ) . From these innovations, Xerox PARC created the Xerox Alto in 1973, a little minicomputer similar to a modern workstation or personal computing machine. This machine can be considered the first true personal computing machine, given its various combination of a cathode-ray-type screen, mouse-type pointing device, and a QWERTY-type alphameric keyboard. But the Alto was ne’er commercially sold, as Xerox itself could non see the gross revenues potency of it. In 1979, several Apple Computer employees, including Steve Jobs, visited Xerox PARC, interested in seeing their developments. Jobs and the others saw the commercial potency of the GUI and mouse, and began development of the Apple Lisa, which Apple introduced in 1983.
In the mid 1980s, Apple considered purchasing Xerox ; nevertheless, a trade was ne’er reached. Apple alternatively bought rights to the Alto GUI and adapted it into to a more low-cost personal computing machine, aimed towards the concern and instruction markets. The Apple Macintosh was released in 1984, and was the first personal computing machine to popularise the GUI and sneak amongst the populace.
The company was revived in the 1980s and 1990s, through betterment in quality design and realignment of its merchandise line. Xerox worked to turn its merchandise into a service, supplying a complete “ papers service ” to companies including supply, care, constellation, and user support. To reenforce this image, the company introduced a corporate signature, “ The Document Company ” above its chief logo and introduced a ruddy “ digital Ten ” . The “ digital Ten ” symbolized the passage of paperss between the paper and digital universes.
Although Xerox is a planetary trade name, it maintains a joint venture, Fuji Xerox, with Nipponese photographic house Fuji Photo Film Co. to develop, bring forth and sell in the Asia-Pacific part. Fuji Photo Film Co. is presently the bulk stakeholder, with 75 % of the shareholding.
Xerox now sponsors the Factory Ducati Team in the World Superbike Championship, under the name of the “ Xerox Ducati ” .
Xerox today industries and sells a broad assortment of office and production equipment including LCD Monitors, exposure duplicators, Xerox Phaser pressmans, multifunction pressmans, large-volume digital pressmans every bit good as workflow package under the trade name scheme of FreeFlow. Xerox besides sells scanners and digital imperativenesss. On 29 May 2008, Xerox launched XEROX iGen 4 digital imperativeness.
It besides produces fax machines, professional pressmans, black and white duplicators, and several other merchandises. In add-on, Xerox produces many printing and office supplies.
Hallmark:
The word “ Xerox ” is normally used as a equivalent word for “ photocopy ” ( both as a noun and a verb ) in many countries ; for illustration, “ I Xeroxed the papers and placed it on your desk. ” or “ Please do a Xeroxed transcript of the articles and manus them out a hebdomad before the test ” . Though both are common, the company does non excuse such utilizations of its hallmark, and is peculiarly concerned about the on-going usage of Xerox as a verb as this places the hallmark in danger of being declared a generic word by the tribunals. The company is engaged in an on-going advertisement and media run to convert the populace that Xerox should non be used as a verb.
To this terminal, the company has written to publications that have used Xerox as a verb, and has besides purchased print advertizements declaring that “ you can non ‘Xerox ‘ a papers, but you can copy it on a Xerox Brand copying machine ” . Xerox Corporation continues to protect its hallmark diligently in most if non all hallmark classs. Despite their attempts, many lexicons continue to advert the usage of “ Xerox ” as a verb, including the OxfordA EnglishA Dictionary.
In 2008, Xerox changed its logo to a ruddy domain with a white Ten with three Greies chevrons. The alteration is meant to reflect less on the exposure copying responsibilities Xerox has carried out and alternatively to refocus on papers direction and solutions across the universe for companies.
About KPMG:
The KPMG web was formed in 1987 when Peat Marwick International and Klynveld Main Goerdeler merged along with their several member houses. There were four cardinal figures in the formation of KPMG. They are the establishing members of the present organisation.
Klynveld:
Piet Klynveld founded the accounting house Klynveld Kraayenhof & A ; Co in Amsterdam. In 1917.
Peat:
William Barclay Peat founded the accounting house Peat & A ; Co in London.
Marwick:
James Marwick established the accounting house Marwick, Mitchell & A ; Co in New York City in 1897.
Goerdeler:
Dr. Reinhard Goerdeler was the first president of the International Federation of Accountants and a president of KPMG. He is credited with puting the foundations of the Klynveld Main Goerdeler Merger.
KPMG houses are some of the universe ‘s prima suppliers of audit, revenue enhancement and advisory services. TheyA have 135,000 people runing in over 140 states.
TheirA pattern isA organized around our Audit, Tax and Advisory patterns.
The Xerox fraud instance:
In one of the latest dirts affecting a outstanding American corporation, Xerox revealed in 2002 that over the five old ages prior to 2002 it had improperly classified over $ 6 billion in gross, taking to an exaggeration of net incomes by about $ 2 billion.
The proclamation of Xerox is non wholly new. The Securities and Exchange Commission ( SEC ) began an probe that ended in April of that twelvemonth. The SEC had charged the manufacturer of duplicators and related services with accounting uses. It was estimated at the clip, nevertheless, that the sum involved was about half that which is now stated, or about $ 3 billion. A colony was finally reached that included a $ 10 million mulct, every bit good as an understanding to carry on a farther audit. It was this audit that produced the $ 6 billion figure.
There were two basic uses that formed the footing for the SEC probe.
1-The foremost was the alleged “ cooky jar ” method. This involved improperly hive awaying gross off the balance sheet and so let go ofing the stored financess at strategic times in order to hike lagging net incomes for a peculiar one-fourth. This is a widely used use.
2-The 2nd method – and what accounted for the larger portion of the deceitful net incomes – was the acceleration of gross from short-run equipment leases, which were improperly classified as long-run rentals.
The difference was important because harmonizing to the Generally Accepted Accounting Principles ( GAAP ) – the criterions by which a company ‘s books are supposed to be measured – the full value of a long-run rental can be included as gross in the first twelvemonth of the understanding. The value of a rental, on the other manus, is spread out over the continuance of the contract.
The consequence of the use was that Xerox could number as net incomes what basically future gross was. This boosted short-run net incomes and allowed the company to run into net income outlooks in 1997, 1998 and 1999, though it had the consequence of cut downing net incomes during the past two old ages. In 1998 Xerox reported a pretax income of $ 579 million, while it should hold reported a loss of $ 13 million. On the other manus, the $ 137 million loss for 2001 will go a $ 365 million addition after the use is reversed. The $ 1.9 billion sum that will now be subtracted from gross reported from 1997-2001 will be added to future studies.
Why carry out these uses when the excess money earned in one twelvemonth would hold to be subtracted from future old ages?
This was necessary because corporations are under tremendous force per unit area from Wall Street investors to maintain up short-run net incomes. Otherwise, their portion values will drop, which non merely threatens companies to a great extent reliant on portion values to finance debt, but besides has fiscal effects for top executives, whose astronomical incomes are bound up with stock options.
Xerox stock raised to a extremum of $ 60 a portion in mid-1999, when the company was transporting out the accounting fraud. It has since declined aggressively and is now merchandising at about $ 7.
Confronted with worsening gross during the late ninetiess that should hold led to lower than expected net incomes studies – thereby reflecting the true nature of the company ‘s deepening jobs – Xerox decided to cook the books. This was done rather methodically. Internal paperss have recorded treatments among top functionaries at Xerox refering ways to pull strings accounting to let the company to run into Wall Street outlooks. Executives seemingly calculated the exact sum that would hold to be altered in order to let the company to merely run into or somewhat exceed “ first call consensus ” outlooks on Wall Street, which are determined prior to a company ‘s release of net incomes informations.
In 1997, for illustration, expected net incomes were at $ 1.99 a portion, while reported net incomes were $ 2.02. Actual net incomes, rectifying for the accounting uses, were at $ 1.65. Using its earlier underestimation of $ 3 billion in improperly classified gross, the SEC calculated these existent net incomes. In 1998, expected and reported net incomes were both at $ 2.33 while existent net incomes were merely $ 1.72 a portion.
Like the WorldCom fraud, Xerox ‘s use should hold been easy to observe if there was anyone interested in looking. As former SEC head accountant Lynn Turner noted, “ These Numberss have gotten so big that it ‘s kindred to hearers driving past Mt. Everest and stating they ne’er saw it… . Corporate America has someway gotten into the mentality that this is OK. ” Xerox ‘s hearer during the period in inquiry was KPMG, one of the “ large four ” accounting houses that dominate the profession. KPMG was fired in October and replaced by PricewaterhouseCoopers.
KPMG was besides portion of the SEC probe that began last twelvemonth. The grounds suggests that the scrutinizing house knew what was traveling on and decided to let it to go on. An internal papers obtained by the SEC contained a statement by a KPMG functionary admiting that Xerox ‘s strategies constituted “ crazy gross acknowledgment. ” When the KPMG hearer in charge of the Xerox history began to raise some concerns about the company ‘s improper techniques, he was replaced with person else.
Earlier this twelvemonth, the SEC considered registering civil charges against top executives at both KPMG and Xerox. The accounting house is presently confronting cases from stockholders bear downing the company with neglecting to scrutinize Xerox decently. KPMG is besides under examination for its function in O.K.ing the books of the drug shop concatenation Rite Aid, which late acknowledged that it inflated its income by more than $ 1 billion over a biennial period. It besides approved the books of the collapsed Belgian package company Lernout & A ; Hauspie Speech Products NV, which has admitted to manufacturing 70 per centum of gross revenues at its largest unit.
Because of its drawn-out crisis, Xerox has been forced to sell off some of its assets. It managed to renegociate its recognition earlier this month, but at higher involvement rates. If the company had failed to renegociate its recognition line, it may hold been unable to run into its duties, coercing it into bankruptcy. This about happened one time earlier, in late 2000.
In an effort to cut back on costs, Xerox has laid off 1000s of workers in the past two old ages and may good do farther retrenchments in the hereafter. On the other manus, as Xerox ‘s problems grew more terrible, the company ‘s CEO Anne Mulchay received a wage bundle in 2001 that could be deserving every bit much as $ 25 million.
Harmonizing to SEC ‘s ailment, the accounting misdemeanors committed by Xerox are:
Accelerating renting gross:
Xerox allegedly repeatedly changed the manner it accounted for rental gross but failed to unwrap that the associated additions were the consequence of accounting alterations instead than improved operating public presentation. Furthermore, many of the patterns used failed to follow with GAAP.
For illustration, Xerox used a return on equity allotment method that involved ciphering the estimated just value of the equipment as the part of the rental payments staying after deducting the estimated just value of the services and funding constituents. As the estimated just value of services and funding declined, the equipment gross revenues gross that was recognized instantly increased.
Improper increases in residuary values of chartered equipment:
Xerox allegedly adjusted the estimated residuary value of leased equipment ( that is, its staying value at the terminal of the lease term ) after the origin of the rental in misdemeanor of GAAP. SEC alleges that this write-up in the residuary value of equipment was used to recognition the cost of gross revenues, were recorded near to the terminal of quarterly coverage periods as “ a gap-closing step to assist Xerox run into or transcend internal and external net incomes and gross outlooks. ”
Acceleration of grosss from portfolio plus scheme minutess:
Selling investors the gross watercourse from portfolios of its rentals that otherwise would non hold allowed for immediate gross acknowledgment. SEC alleges that Xerox used these minutess to acknowledge gross that would hold otherwise been recognized in future periods and failed to unwrap this pattern
Deceitful use of militias and other income:
Xerox allegedly increased its net incomes by let go ofing extra militias that were originally established for some other intent into income in misdemeanor of GAAP. Xerox besides allegedly consistently released a addition associated with the successful declaration of a difference with the Internal Revenue Service to improperly increase net incomes from 1997 through 2000. Although GAAP required that the full addition be recognized upon the completion of all legal eventualities in 1995 and 1996, Xerox used most of it to run into its net incomes marks.
Failure to unwrap factoring minutess:
Xerox allegedly failed to unwrap factoring minutess that allowed it to describe a positive twelvemonth terminal hard currency balance, alternatively of a negative 1. This factorization involved
Xerox selling its receivables at a price reduction in order to recognize instant hard currency alternatively of a future watercourse of hard currency. Harmonizing to SEC ailment, analysts looked to Xerox to increase its liquidness and called for stronger end-of twelvemonth hard currency balances in 1999. Unable to bring forth hard currency, Xerox direction instructed its largest runing units to research the possibility of prosecuting in factoring minutess with local Bankss. These minutess materially affected Xerox ‘s 1999 operating hard currency flows but these
Minutess were non disclosed in its 1999 fiscal statements. In some of the factoring minutess involved buy-back understandings in which Xerox would reacquire the receivables after the terminal of the twelvemonth. By accounting for these minutess as true gross revenues, Xerox violated GAAP. Not merely did Xerox neglect to unwrap the understandings, it failed to change by reversal them in the following twelvemonth.
Without acknowledging or denying the allegations of the ailment, Xerox consented to a concluding judgement that includes a lasting injunction from go againsting the antifraud, coverage and recordkeeping commissariats of the federal securities Torahs, specifically Section 17 ( a ) of the Securities Act of 1933 and Sections 10 ( B ) , 13 ( a ) , 13 ( B ) ( 2 ) ( A ) and 13 ( B ) ( 2 ) ( B ) of the Exchange Act and Rules 10b-5, 13a-1. 13a-13, 12b-20 and 13b2-1 promulgated there under. In add-on, Xerox agreed to repeat its financials for the old ages 1997 through 2000 and pay a $ 10 million civil punishment. As portion of this understanding, Xerox besides agreed to hold its board of managers review the company ‘s material internal accounting controls and policies.
The Consequences that followed:
Xerox Corp. agreed to pay $ 670 million while KPMG LLP had to pay $ 80 million, to settle an eight-year-old securities case filed on behalf of Xerox investors who claimed Xerox committed accounting fraud to run into Wall Street net incomes outlooks.
The instance of Carlson v. Xerox Corp. , filed on behalf of buyers of Xerox common stock and bonds from between February 1998 and June 27, was something of a high profile one for the pre-Enron epoch.
In April 2002, Xerox had already agreed to a $ 10 million mulct as portion of a colony with the Securities and Exchange Commission. The mulct was the largest of all time paid by a company to settle with the SEC at that clip.
The SEC charged that the duplicator company schemed to victimize investors during a four-year period by utilizing what it called “ accounting actions ” and “ accounting chances ” to run into or transcend Wall Street outlooks and mask its true operating public presentation. The committee stated at the clip that most of the actions violated by and large accepted accounting rules, and therefore accelerated the company ‘s acknowledgment of equipment gross by more than $ 3 billion and increasing its pretax net incomes by about $ 1.5 billion.
In 2005, KPMG agreed to pay $ 22.5 million to settle SEC charges related to its audits of Xerox from 1997 through 2000. Under that agreement, the house agreed to release the $ 9.8 million in fees it received for scrutinizing Xerox ‘s books during that clip, and pay $ 2.7 million in involvement and a $ 10 million civil punishment. The entire bundle was the largest payment of all time made to the SEC by an audit house.
The Securities and Exchange Commission besides charged six former senior executives of Xerox Corporation, including its former main executive officers, Paul A. Allaire and G. Richard Thoman, and its former main fiscal officer, Barry D. Romeril, with securities fraud and aiding and abetting Xerox ‘s misdemeanors of the coverage, books and records and internal control commissariats of the federal securities Torahs.
The six suspects agreed to pay over $ 22 million in punishments, vomit and involvement without acknowledging or denying the SEC ‘s allegations. The SEC intended to hold these financess paid into a tribunal history pursuant to the Fair Fund commissariats of Section 308 ( a ) of the Sarbanes-Oxley Act of 2002 for ultimate distribution to victims of the alleged fraud.
The suspects had each offered to settle by accepting, without acknowledging or denying the SEC ‘s allegations, to the entry of a concluding judgement in the civil action that:
for good enjoins each of them from go againsting Section 10 ( B ) of the Exchange Act and Rule 10b-5 there under, helping and abetting misdemeanors of Sections 13 ( a ) , 13 ( B ) ( 2 ) ( A ) and 13 ( B ) ( 2 ) ( B ) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 there under, and ( except for Allaire and Thoman ) go againsting Section 13 ( B ) ( 5 ) of the Exchange Act and Rule 13b2-1 there under ; imposes an officer and manager saloon against Allaire ( 5 old ages ) , Thoman ( 3 old ages ) Romeril ( permanent ) , and Fishbach ( 5 old ages ) ; requires each of them to pay civil punishments in the undermentioned sums: $ 1 million for Allaire ; $ 750,000 for Thoman ; $ 1 million for Romeril ; $ 100,000 for Fishbach ; $ 75,000 for Marchibroda ; and $ 75,000 for Tayler ;
Requires Fishbach and Marchibroda to release their several rights to certain deferred fillips ( $ 127,035 for Fishbach and $ 50,228 for Marchibroda ) plus accumulated involvement on these sums.
Requires each of them to pay vomit and prejudgment involvement thereon in the undermentioned sums:
Allaire:
$ 5,696,678 – vomit ;
$ 1,938,124 – prejudgement involvement ;
Thoman:
$ 4,668,396 – vomit ;
$ 1,440,993 – prejudgement involvement ;
Romeril:
$ 2,987,282 – vomit ;
$ 1,227,688 – prejudgement involvement ;
Fishbach:
$ 666,748 – vomit ;
$ 289,904 – prejudgement involvement ;
Marchibroda:
$ 273,399 – vomit ;
$ 88,920 – prejudgement involvement ;
Tayler:
$ 92,603 – vomit ;
$ 32,397 – prejudgement involvement ; and ;
Required Fishbach and Marchibroda to release their several rights to certain deferred fillips ( $ 127,035 for Fishbach and $ 50,228 for Marchibroda ) plus accumulated involvement on these sums.
In add-on, both Romeril and Tayler agreed to the entry by the SEC of an Order pursuant to Govern 102 ( vitamin E ) of the SEC ‘s Rules of Practice that suspends each of them ( based on the entry of the injunction in the federal tribunal action ) from looking or practising before the SEC as an comptroller. This Order will suspend Romeril for good and suspend Tayler for three old ages with a right to use for reinstatement after the three-year period.
