Xerox Accounting Faces Scrutiny As Firm Delays Its Annual Report.(A)

Shares of Xerox Corp. on Tuesday tumbled to their lowest level since the first trading session of 2001 amid renewed concern aboutthe troubled office equipment maker's accounting practices.

Xerox's shares were down 1.02, or 17%, to 4.98 in late afternoon trading.

The Stamford, Conn.-based company, once dominant but now playing catch-up inthe copier market, was struck with yet another blow on Monday when it delayed the filing of its 2000 annual report because its auditing firm requested more time to more thoroughly review the books.

Accounting Irregularities

KPMG, Xerox's auditors, advised the company that a more thorough review of the year-end 10-K financial statement is needed for it to satisfy its responsibilities.

Xerox uncovered accounting irregularities last year at its Mexico unit, where it insists the problem was isolated. This year, however, the company has struggled in its attempts to convince investors that the rest of its books are sound, and that its top management properly handled the situation.

Wall Street analysts said that while it is possible the financial statement would be free of blemishes, Xerox's recent track record made it hard to be optimistic.