Posted by & filed under Fraud Accounting.

Budget cuts and reorganizations raise the pressure for individuals to meet performance targets the risk of fraud increases.

 Steps firms can take to help curtail corporate fraud:

1.     Know who you hire. Contact references and verify the education of potential hires. Conduct criminal and financial background checks on those being considered for financially sensitive positions.

 2.     Take away temptation. Perform regular ethical and social hacking to ensure Internet access and systems controls are secure.

 3.     Keep staff informed. Annual organization-wide ethics training delivers a consistent message. A strong ethical environment encourages self-policing.

 4.     Establish detection mechanisms. A combination of internal audits, surprise audits and senior management reviews will ensure the right questions are being asked at every level. This over-sight should extend to remote locations.

 Implement checks and balances. While most fraud occurs in non-management ranks, fraud by executives is often more costly. Create an advisory committee to provide oversight at all levels.

 Set up an anonymous hotline to report fraud. When a call comes in, act quickly to confirm its validity.

 Take action. If fraud is detected, implement a rapid-response plan for investigating, reporting and prosecuting misconduct, fraud or corruption. Follow-up procedures ensure questionable behaviour is not overlooked. Then put controls in place to prevent this type of fraud from happening again.

 Discussion Questions:

  1. Why is fraud more prevalent in poor economic times?
  2. Know who you hire; why is this preventive control so important?
  3. Do you feel that applying all the above controls, will prevent fraud?

To read more: visit the October issue of  CA magagine


Written by: Jonathan Marks partner who leads the fraud and ethics group at US accounting and consulting firm Crowe Horwath (www.crowehorwath.com)

 

Posted by & filed under Accounting Careers, Corporate Restructuring, Financial Accounting, Taxation & Planning.

To Some!

CAs are dull and colourless, but to SMEs (Small Medium Enterprises), they are trusted advisers, valuable sources of information and providers of many services

 Not True!

Bland, boring and colourless are just a few of the common stereotypes that spring to mind when describing an accountant. But these are just urban myths. In the small and medium enterprise (SME) world, the accountant holds the status of a hero, one who fights for entrepreneurs against the multiheaded monsters of fiscality, government regulation and foreign competition.

 While not an exhaustive list, here are at least a few such services.

 Preparation of Financial Statements:

Basic preparation of financial reports can involve a lot of added value. “There’s a lot of value simply in giving a SME the exact report it needs,” Lavigne says. “For example, an obvious question is: should it have reports in line with the new IFRS rules or with Canadian GAAP? What level of credibility do you need to give them: a basic “Notice to Readers, a “Review Engagement” or an “ Audit Report”?

Just sorting out the regulatory constraints that underpin those choice implies a refined level of knowledge on the accountant’s part

 Helping Startup Companies:

There are levels where accounting goes beyond report preparation and reaches the heights of strategy — if not art. This is what Pierre Bélanger, president of Dagua Inc., witnessed while working with an external accounting firm. A startup firm, Dagua has attracted major investment partners with its groundbreaking self-contained water filtering station, which uses ozone rather than chemicals to make contaminated water drinkable.

With a few simple manoeuvres, the accountant changed the company’s financial position. Dagua was spending a lot of money promoting its product before it was ready to come off the production line. “We were showing heavy losses,” says Bélanger.

A seasoned businessman, Bélanger did not see how he could present more favourable statements. The accountant took advantage of special laws applying to startups to capitalize marketing expenses that were going to show results in only three or four years. “We transferred more than $2 million in expenses and showed results that were much better aligned with our company’s position in a startup’s life cycle,” Bélanger says.

 Corporate Restructuring:

Diagnocure, a well-established biotechnology company in Quebec City, benefited from the fiscal expertise of a large accounting firm. “During the corporate restructuring, it made a difference,” says financial manager Frédéric Boivin. When Diagnocure bought a firm in the US and opened a US subsidiary to market its new diagnostic test, it faced conflicting scenarios. For example, it could incorporate the companies in the US, create limited partnerships, make one company dependent on the other, or liquidate both and control everything from Canada.

“We ended up forming a limited partnership for the company we bought out and set up a general partnership with the one we created. When the general partnership will have fulfilled its objective, it will absorb the limited one and, as profit shows up, it will be transferred to the parent company in Canada to help it cover its losses.”

 Cash Flow Forecasting:

Dagua found its accountant’s high value area was financial forecasting. “His expertise proved essential,” Bélanger says. “Sure, management knew what the money inflows and outflows were in a few areas, but those represent maybe 10 out of 60 lines in a spreadsheet. We were at a loss concerning the way to account for cash flows around real estate, purchases, diverse depreciations and sales tax inputs. Our accountant knew.”

 Succession Planning:

Accountants are uniquely qualified to address many issues in family successions, says Robinson, whose firm specializes in such succession issues as estate freezes, valuing the business and transferring shares. But the real value accountants can bring is in the soft skills of dealing with people, emotions and egos.

 The full value an accountant can bring to SMEs is even greater. In fact, the whole is so colossal, you may wonder how accountants remain so unassuming.

 Discussion Questions:

  1. Does the article give you a sense that the Accountant is more than an Accountant?
  2. What do you understand from Succession Planning? Ask your teacher, for more details.
  3. How important is Cash Flow Forecasting for a company?

 This article was edited from the CA Magagine, authored by Yan Barcelo, to read all the Ten Ways that an accountant provides value to SMEs visit the camagazine link.

 

Posted by & filed under Accounting Careers.

Brilliant Futures:

During our College wide open house, most new College students are wondering, do we have a future:?

Here is the PWC (PriceWaterhouseCoopers) perspective.

At PwC, the company will help you create your own brilliant future. You’ve worked hard at  College & University to give yourself that head start. We’ll build on your education and give you the technical training and people skills you need to make the most of your career. We work in a team-based learning environment. Most of your development will take place on the job, but you’ll also get plenty of coaching and classroom-based training.

You’ll be mentored, finding yourself inspired and embracing the insights of others. You’ll also begin coaching others early on, developing your own ability to inspire and motivate people. We’ll help you build relationships with your colleagues and clients so you can provide them with the value they’re looking for.

We’re often asked what a career path at PwC looks like

Some people join us looking to specialize in a specific area, becoming an expert in their field. Some of us like to experience one area of PwC and then move to a different line of service to explore other areas of the firm. For others, a career goal is to become a partner.

The path to partnership takes years of hard work and determination. You’ll find that there are opportunities for promotion to the next level as you master technical skills, build internal and external relationships, and gain credentials and experience.

With each step of your career, you’ll take on increased responsibilities and more complex client work. You’ll manage larger teams, become a coach to others in the firm and play a key role in building the practice. You’ll become directly responsible for relationships and services to clients, understanding what value looks like for them and making sure we deliver on their own unique expectations. Reaching the partner level means that you have a history of exceptional performance and commitment to the firm as well as deep technical and industry knowledge.

 

 UFE Preparation Program

As a new employee and CA student at PwC, your preparation for the UFE begins soon after arriving at the firm. Led by highly-trained instructors, the program includes practical training, workshops and practice sessions with questions from actual exams and other reference materials. We provide you with extensive study leave and we even cover all UFE-related exam fees.

To learn more about the UFE and about PWC: visit the PWC website

Discussion questions:

1. Visit the above PWC website, what did you find interesting, have an open discussion with your classmates.

2. Do you find that PWC wants to help you achieve your goals?

3. What do you envision a Professional  Chartered Accountant does on a day to day basis?

Text taken from the PWC website

Posted by & filed under Accounting Careers.

Recommend Going Forward

 The CA, CMA and CGA Orders in Quebec recently announced that their respective boards of directors have recommended moving forward with a merger of their organizations. With this favourable recommendation to the Office des professions, the provincial government is expected to introduce legislation in early 2012 that would establish a new professional accounting order representing more than 34,000 Quebec CAs, CMAs and CGAs.

Best Interest for Everyone

As you will see in the news release issued on October 4, the Quebec Orders concluded that uniting the profession is in the best interests of their members and the public, citing the emergence of international accounting standards and the blurring differences among the designations

Significant Development

This is a significant development for our colleagues in Quebec, and one that we have been watching very closely as we explore the merits and feasibility of uniting the CA and CMA bodies across the country.

CICA Mission Statement

 Our mission is to foster public confidence in the CA profession by acting in the public interest and helping our members excel.

 Vision Statement for Canada’s CAs

 “We are Canada’s most valued, internationally recognized profession of leaders in senior management, advisory, financial, tax and assurance roles.”

 Value Statement for the CA Profession

“Chartered Accountants are valued for their integrity and expertise”

To read more on the Unification , please see your source for the CA -CMA merger www.cpacanada.ca, go to the site and listen to the video commentaries.

Discussion Questions:

1. Do you believe that the Unification will happen for all CA’s, CMA’s and CGA’s for all of Canada?

2. Do you agree that unification is for the best interest of the public?

3. How will Unification help you the student, from a job market point of view.

4.Can you come up with a new Mission Statement for CPA’s?

Note: Information taken from the CICA website and www.cpacanada.ca

 

 

 

Posted by & filed under Accounting Careers, Taxation & Planning.

Foreword:

According to Benjamin Franklin, taxation was an absolute certainty in this world. Taxation continues to be an inescapable fact of life in our modern global world. For CGA-Canada and our members – business and accounting leaders across the country – taxation has always been a key area of interest and concern.

On an international scale, Canada’s tax system is among the most complex in the world – this hurts our economy and adversely affects small and medium size enterprises (SMEs) as well as individual taxpayers. Canadians want governments to make taxes simpler, fairer and more efficient.

 The Nature of Tax Complexity

 Tax simplification has many dimensions. For some, tax simplification means easier to read and understand tax law. The focus of this view is on the Income Tax Act that has grown from its beginning in 1917, as the Income War Tax Act, an Act of 11 pages in length including regulations, to the ITA today, which contains some 2800 pages, including regulations and commentary. One significant reason for its growth is the simple fact that while a multitude of special measures have been introduced into the ITA since its inception, next to nothing has been removed from it.

 Why is the ITA so complicated for even the seemingly sophisticated tax expert?

The quick answer is that these experts find the ITA complex because it is just that – complex.

  The Reason for Tax Complexity

Complexity arises from the simple fact that we require the tax system to serve a number of conflicting purposes. First, we want the tax system to respond to changing financial and economic circumstances. Second, we want the tax system to ensure fairness for taxpayers. Third, we want the tax system to provide taxpayers with a reasonable degree of certainty. Finally, and perhaps most importantly, we want the tax system to preserve government tax revenues.

 The Need for Fairness

The tax system is also committed to fairness. Given the wide variety and extreme complexity of economic and social situations which the tax system must accommodate, it is impossible for the tax system to be fair without being complex.

 Discussion Questions:

1. How many of you have completed your personal income taxes? What was your experience?

 2. Why do you think the Income Tax Act is so complex?

 3. How would you simplify the Income Tax Act?

 The complete article may be read online: The need for Tax Simplification – Challenge and an Opportunity

Information obtained from the CGA website:

About the Authors

C. Scott Clark is currently President of C. S. Clark Consulting and previously served as Assistant Deputy Minister,

Associate Deputy Minister, and Deputy Minister of Finance.

Len Farber is currently a Senior Advisor at Norton Rose OR LLP and previously served as General Director

responsible for Tax Policy in the Department of Finance.

 

 

Posted by & filed under Accounting Principles, Advanced Accounting, Financial Accounting, IFRS, International Accounting.

Canadian Private Enterprises will soon need to make a choice

Canadian publicly accountable enterprises will be required to use International Financial Reporting Standards (IFRS) for fiscal years beginning January 1, 2011.  What about Canadian private companies?

Canadian Private companies will have an option to adopt one of the two following sets of standards:

  • International Financial Reporting Standards (IFRS)
  • Accounting Standards for Private Enterprises (ASPE)

Both standards would be for annual financial statements relating to fiscal years beginning on or after January 1, 2011.

Which standards is the best choice for your enterprise?

When going through the process of which standard to adopt the following decision tree should be used as a guide:

Private companies should consider IFRS if:

1. Plans to issue equity for growth, obtain external financing from Canadian and Foreign Banks, competing with public companies for access to credit, is a foreign subsidiary whose parent reports in accordance with IFRS .

2. A Private company should consider ASPE if it: Has no plans to access the public equity markets, no plans to obtain debt from outside of Canada, wants current reporting that is simple with minimal complexities, prepare financial statements for owners and tax compliance.

The Advantages of ASPE

Canadian Market place is familiar with the framework, more emphasis on historical cost , any private company can use the ASPE standards regardless of size.

Discussion Questions:

1. Do you agree with the two separate standards?

2. As a professional Accountant, should we specialize in IFRS or ASPE?

3. Do you feel that the public will be confused by adopting two different Accounting Frameworks?

Article taken from PWC.CA , to read more visit www.pwc.com/ca/private

Posted by & filed under Canadian Economy, Taxation & Planning.

Tapping into opportunities for the students of tomorrow:

Benefits of the RESP

Under the program, both subscriber and government contributions can grow tax-free until the funds are withdrawn to attend an accredited post-secondary institution. Many employers  recognize a post-secondary education (PSE) as a pre-requisite when hiring. Specialized educational achievements are seen as indicators of a candidate’s ability to perform at a high level not only on the job, but also to successfully navigate the challenges of dynamic, modern workplaces.

Increasing cost of education

From 1989 to 2009 tuition fees in Canada more than doubled causing the levels of student borrowing and associated debt to increase.

Existing barriers

Despite the numerous benefits offered by the RESP, many households are not taking advantage of this option. Unawareness of the RESP and the complexity of its definitions and processes were found to be factors for RESP enrolment complacency, especially for the low and middle income demographic.

Low Income Families

It is widely accepted that economically disadvantaged students in Canada are less likely to pursue a university education than students from well-to-do families. While the level of a household’s income may pose a barrier for a student to attend a post-secondary institution, the current financial crisis further hinders a family from saving for PSE through RESPs.

Student Loans

Student loans remain the primary source of funding for costs associated with PSE such as living expenses, tuition and textbooks. In 2008, the average student debt upon graduation increased to $15,466 from $11,250 in 2000. While students may still need to rely on loans, bursaries and scholarships to finance their PSE, RESPs can make a significant impact and reduce the level of overall student debt.

Raise Awareness to the Benefits of RESP’s

Collaboration between financial institutions and group scholarship providers, who can communicate the benefits of RESPs, may be one way to raise awareness and encourage greater participation.

To obtain more information read the complete,Article from the CGA magazine:

Discussion Questions:

1. Why are Youth from Lower-income Families Less Likely to Attend University?

2. Where would you obtain more information on RESPs?

3. Do you find that more students are working today to pay for their education?

Posted by & filed under Accounting Careers, Canadian Economy.

 

One in three employers around the world is having a hard time finding qualified talent —

 including accounting and finance staff — according to a survey by US-based global staffing

service ManpowerGroup. Of the employers polled, 90% say available job candidates do not

have the necessary skills and experience, have insufficient qualifications or lack soft skills.

The hardest jobs to fill globally this year are:

1. Technicians
2. Sales representatives
3. Skilled trades workers
4. Engineers
5. Labourers
6. Management/executives
7. Accounting and finance staff
8. IT staff
9. Production operators
10. Secretaries, administrative assistants and office support staff.

 Information obtained from the September Issue of CA magazine:

Discussion Questions:

1. Are you considering a profession in Accounting? Why?

2. Do you think there will always be a demand for Accountants, in both good and poor economies?

3. Do you know anyone who works in Finance? What do they do?

 

 

 

 

 

 

Posted by & filed under Accounting Careers, Corporate Restructuring.

Why are we considering the creation of a new designation?

We are witnessing an irreversible international trend in which forces are converging around three major bodies: the American Certified Public Accountants (CPAs), the Global Accounting Alliance (GAA), made up of 11 of the leading accounting organizations in the world, and the Association of Chartered Certified Accountants (ACCA) of the United Kingdom.

The CPA is already an extremely strong brand, both within North America and around the globe. In fact, it is the most used accounting designation worldwide. This designation will evolve into a globally recognized business credential in the areas of financial and strategic management, business leadership, and auditing and assurance competencies. In our view, it is essential that we align ourselves with the global accounting designation of choice, should a single designation emerge.

The designation

Members are proud of their professional designation. For that reason, they will retain their current designation (CA, CGA, CMA) and add the Quebec and Canadian Chartered Professional Accountant – CPA designation. They will be designated as follows:

First Name Last Name, CPA, CA

First Name Last Name, CPA, CGA

First Name Last Name, CPA, CMA

All members in good standing of the three existing accounting Orders will be granted the CPA designation while retaining their current professional designation.

The use of both designations will be mandatory for 10 years. After this period, members will have the choice of using the CPA alone or of continuing to use the CPA, CA, or the CPA, CGA or the CPA, CMA.

Besides being the most used worldwide, this designation will evolve into a globally recognized business credential in the areas of financial and strategic management, business leadership, and auditing and assurance competencies.

This designation will represent a unique combination of expertise in all areas of accounting, including financial and management accounting and taxation.

Retention of rights

The unification agreement will protect the rights of members of the three accounting Orders, such as public accounting licensing rights and rights under any existing Mutual Recognition Agreements. However, no new rights will be granted and there will be no expansion of current rights.

For example, members of the new Order who would like to practice public accountancy will be required to hold a public accountancy permit, which will allow them to use the CPA auditor designation.

Documentation obtained from the Ordre des comptables agrees du Quebec ordre des comptables agrees:

Discussion Questions:

1. Which professional designation were you considering of obtaining?

2. Would the creation of only one Public Accounting Designation be beneficial to you, from an economic point of view, especially if the Designation is recognized world wide?

3. Will confusion be eliminated by having only one designation?

Posted by & filed under Accounting Careers, Financial Accounting, Financial Statement Analysis, Managerial Accounting.

Small business owners in Canada are a happy group, a new survey says. In fact, 62% of Canadian small business owners would describe themselves as “very happy” with only 1% saying they are “very unhappy.”

These are just some of the findings from TD’s Small Business Happiness Index, which examined the attitudes and behaviour of Canadian small business owners in seven urban centres. It  revealed that nearly 9 in 10 Canadian small business owners are happier owning and running their own business than they would be if working for someone else.

Why are small business owners so happy?
There are several reasons for Canadian small business owners’ high satisfaction levels. These include a sense of pride and accomplishment (97%) plus a deep personal connection to their employees (91%) and their customers (84%).

The challenges
As rewarding as it is, small business ownership also has its difficulties. The top three cited were managing, recruiting and training staff (24%), coping with stress and risk (23%), and financing and cash flow (22%).

  • Keep a close eye on the key metrics that are essential to your business’ success
    “It is impossible to analyze every part of your business every day.  Instead, ask yourself, what are those essential measures that determine the health of your company? Whether it is speed of inventory turnover, utilization rates or total cash in the bank, ensure you have a system in place that provides an easy way to check those numbers in real time.”
  • Understand how to read an income statement and balance sheet
    “Put yourself in the shoes of your investors, the bank where you would like a loan, or a potential buyer down the road and make sure you’re at ease with how to read — and explain — your financial statements.”

Forget the static five-year plan
“Given the speed of business today and the impact of ever-changing technology, a static business plan that lasts five years may be unrealistic. Your business plan should be a living document, updated at least annually with a rolling three-year forecast to make sure your business stays on track. And it’s essential to have both a long-term vision for your company and a series of short-term goals. 

  • Keep a close eye on the key metrics that are essential to your business’ success
    “It is impossible to analyze every part of your business every day.  Instead, ask yourself, what are those essential measures that determine the health of your company? Whether it is speed of inventory turnover, utilization rates or total cash in the bank, ensure you have a system in place that provides an easy way to check those numbers in real time.”

  • Understand how to read an income statement and balance sheet
    “Put yourself in the shoes of your investors, the bank where you would like a loan, or a potential buyer down the road and make sure you’re at ease with how to read — and explain — your financial statements.”

Forget the static five-year plan
“Given the speed of business today and the impact of ever-changing technology, a static business plan that lasts five years may be unrealistic. Your business plan should be a living document, updated at least annually with a rolling three-year forecast to make sure your business stays on track. And it’s essential to have both a long-term vision for your company and a series of short-term goals.

For more details read the complete the CA magagine article

Discussion Questions:

1. Why is it important for business owners to have financial accounting information?

2.For a business owner, would you conider having both knowledge of management accounting and financial accounting?

3. Would you consider the following ratios: Current Assets and Quick Ratios to be an important tool, to manage a small business?