Another SEC Probe of Xerox’s Practices

Another division of the Securities and Exchange Commission is investigating Xerox Corp.’s accounting practices, the company disclosed in its latest filing with the federal agency. The Stamford, Conn.-based maker of copiers and printers reported Tuesday in a filing with the SEC that the agency’s Division of Corporate Finance and its Office of Chief Accountant are reviewing how the company accounts for sales-type leases.

At issue is when Xerox accounts for revenue for selling and leasing its equipment. The SEC is investigating whether Xerox booked too much revenue upfront rather than over the life of leases. Xerox said it was advised last year that the SEC’s Division of Enforcement had begun investigating its accounting and financial reporting practices, initially at its Mexico operations. The probe then broadened.

Xerox, which fired several executives in Mexico and took a $120-million after-tax charge last year, has said the problems were limited to domineering managers who sought to drive growth at any cost.