Wiley Accounting Updates

Posted March 6th, 2023 by Brent White & filed under Canadian Government, Personal Tax.

Description: Canada Revenue Agency (CRA) employees and the Government of Canada are currently at a collective-bargaining impasse. Strike votes are taking place between now and April 7, right in the heart of tax season, when individuals and businesses are normally flooding the CRA call centres with taxation questions. Union President Marc Brière has noted that a strike at this time would “could certainly disrupt the service to taxpayers.” Some might call that an understatement.

Date: February 27, 2023

Source: ottawasun.com

Link: https://ottawasun.com/news/local-news/how-a-canada-revenue-agency-strike-could-impact-the-2023-tax-season/wcm/eb6f9820-eb69-4e1f-8494-4d54b2b10fb8

Discussion points:

1) How do you think this possible strike will influence Canadians trying to do their tax returns?

2) Have you ever had to phone the CRA for assistance in completing your tax return? How would you rate the experience?

3) Chapter One of Wiley’s Financial Accounting: Tools for Business Decision-Making notes that CRA uses information from financial statements of Canadian companies when it assesses income tax returns. Do you think that a strike could create any compliance problems for CRA?

Posted March 6th, 2023 by Brent White & filed under Accounting Careers, Canadian Government.

Description: The Government of Canada is scrambling to collect payroll over-payments from thousands of its employees before it runs out of time. These over-payments were generated by the much-maligned Phoenix payroll system, and, the statute of limitations to recover these amounts expires after six years. Phoenix went live in 2016 and problems with pay were reported almost immediately, so the clock has been ticking. Chris Aylward, the president of the the Public Service Alliance of Canada union, offered that “It’s unbelievable that the government is forging ahead with this heavy-handed clawback for workers . . . while leaving over $15.5 billion uncollected from big corporations who received excessive COVID subsidies during the pandemic.”

Date: February 23, 2023

Source: torontosun.com

Link: https://torontosun.com/news/local-news/phoenix-overpayments-continue-to-haunt-public-servants/wcm/9b76770c-3013-4ee6-879b-b385ee26e91f

Discussion points:

1) Have you or any of your classmates experienced any pay problems from the Phoenix payroll system? If so, have any of you been flagged for overpayments?

2) Do you think the employees should be held responsible for returning the over-payments?

3) Chapter One of Wiley’s Managerial Accounting: Tools for Business Decision-Making tells us about the trend towards our economy becoming a service economy, including services provided by governmental agencies. If you were an accounting officer for a Government of Canada agency, what impact would these payroll problems with Phoenix have had on your costing of government services?

Posted March 6th, 2023 by Brent White & filed under Marketing & Strategy.

Description: American high-end retailer Nordstrom is pulling out of Canada. The chain started Canadian operations in 2014, but it has not been making any money here, reporting losses of $72 million in 2022. The Retail Strategy Group’s Liza Amlani was not surprised by Nordstrom’s move, noting that it had made the same classic mistake as other American firms starting operations in Canada: failing to distinguish the fact that what works in the United States may not work in Canada’s retail environment.

Date: March 3, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/nordstrom-retail-analysis-1.6767321

Discussion points:

1) How many students in your class have ever shopped at Nordstrom?

2) Why do you think smart and highly paid executives at Nordstrom and other retailers have made the mistake of assuming Canadian markets will behave just like U.S. markets?

3) Page 6-5 of Wiley’s Financial Accounting: Tools for Business Decision-Making tells us about an innovation that Nordstrom has made to expand the shopping options for consumers. What is the innovation noted there?

Posted February 27th, 2023 by Brent White & filed under Financial Reporting and Analysis, Student life.

Description: Are tip amounts in Canada rising? Some customers are perhaps experiencing sticker shock when their servers hand them a payment unit with tip option buttons of 20%, 25%, or even 30% after tax, when the traditional standard has been 15% pre-taxes. In the face of this ‘tip fatigue,” some restaurants, such as Folke’s in Vancouver, are simply raising prices high enough to pay employees better wages, canning the tip option. According to pollster Angus Reid, 59% of Canadians would like to see all-inclusive pricing when we dine out, but only 2% of restaurants are there already, perhaps fearing a competitive disadvantage on the pricing side until everyone joins the party.

Date: February 23, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/no-tipping-model-restaurants-1.6755944

Discussion points:

1) How do your friends and classmates feel about tipping? (Perhaps try an in-class survey or discussion.)

2) Have you ever worked at a job where you depended upon tips? Did this alter your own tipping-behaviour?

3) Chapter 1 of Wiley’s Understanding Financial Accounting introduces us to the typical financial statements of a corporation. Which lines in the income statement would likely change the most dramatically for a restaurant that moved to an all-inclusive pricing model from a tipping model?

Posted February 27th, 2023 by Brent White & filed under Canadian governments, Fraud.

Description: A Florida man has been sentenced to over 7 years in prison for a $2.6 million fraud on 3 different U.S. federal Covid-19 relief programs. Daniel Joseph Tisone provided false information to support a variety of applications for loans designed to assist business in the SARS-Cov-2 crisis. While the programs were intended to support business expenses like wages for employees and mortgage interest, Tisone purchased 2 homes, a boat, and a 4.02-carat ring. He forfeits these assets as part of a plea arrangement.

Date: February 24, 2023

Source: ctvnews.ca

Link: https://www.ctvnews.ca/business/florida-man-gets-7-years-for-us-2-6m-covid-19-relief-fraud-1.6288384

Discussion points:

1) Have you heard of any similar cases of abuse of Canadian government programs for Covid-19 financial relief?

2) Do you think Canada had enough controls in place for the various financial relief programs it offered Canadians during the SARS-Cov-2 crisis.?

3) Page 6-7 of Wiley’s Understanding Financial Accounting introduces us to the limitations of internal control. Which of these limitations do you think may have been in play with the fraud mentioned in the story?

Posted February 27th, 2023 by Brent White & filed under Canadian Economy, Canadian Government.

Description: In an apparent response to the federal government’s Online News Act, Google has blocked some Canadians from their news feeds. Google has called this a test, noting the company runs thousands of tests like this in any given year. The Act will force platforms like Google and Facebook to begin compensating media publishers for stories these publishers produced. Traditional media see this as necessary given the volume of advertising revenue flowing to the web. Australia passed a similar legislation in 2021 despite a stare-down with Facebook, perhaps supporting Heritage Minister Pablo Rodriguez’s contention that Canadians won’t be intimidated.

Date: February 22, 2023

Source: abcnews.com

Link: https://abcnews.go.com/Business/wireStory/google-tests-blocking-news-content-canadians-97403719

Discussion points:

1) What percentage of your news do you get from Google or Facebook versus the traditional media?

2) Do you think Canada should have legislation requiring the tech giants to compensate the traditional media publishers who produce the news?

3) Page 14-12 of Wiley’s Financial Accounting: Tools for Business Decision-Making notes that Google is one source of financial information for ratio analysis. What other sources are noted there?

Posted February 20th, 2023 by Brent White & filed under Marketing & Strategy, Student life.

Description: If you’re a Starbucks’ rewards points regular, you may have noticed that the company has raised the bar, now requiring twice as many points for some of the free treat options. Hot coffee, tea, and bakery selections that used to cost you 50 stars (or points) will now cost you double that amount. If you like to make your Starbucks coffee at home though, these changes will benefit you. The package of ground coffee or coffee beans that used to drain 400 stars from your account now will only cost you 300.

Date: February 10, 2023; updated February 13, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/starbucks-reward-points-changes-1.6741255

Discussion points:

1) How many of your classmates are Starbucks Rewards collectors? How do they react to this points change?

2) Why do you think Starbucks raised the bar on some items and lowered it on others?

3) On page 10-10 of Wiley’s Financial Accounting: Tools for Business Decision-Making you will find a discussion of loyalty programs like those offered by Starbucks. How are they accounted for?

Posted February 20th, 2023 by Brent White & filed under Accounting Careers, Data security.

Description: Indigo Books and Music has a new website up and running following a recent cyberattack. But in this temporary site, Indigo says you can only “window-shop online.” You may browse, but if you find an item that interests you, you will need to go to an Indigo or Chapters store to purchase it. Indigo has not disclosed much in the way of detail about the incident. Sophos security expert Chester Wisniewski noted that it “doesn’t reflect well on brands when they’re not forthcoming about what’s going on.”

Date: February 17, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/indigo-temporary-website-cybersecurity-1.6752009

Discussion points:

1) Are you an Indigo customer? If so, what sort of communication have you received from the company?

2) If you were a senior financial officer at a company hit by a cybersecurity incident, what response would you advise your management colleagues to disclose to your customers?

3) Page 7-3 of Wiley’s Financial Accounting: Tools for Business Decision-Making focuses on the five control activities in place at most companies. Which of these activities do you see as key to preventing security incidents like the one that hit Indigo?

Posted February 20th, 2023 by Brent White & filed under Canadian Economy, Student life.

Description: Air Canada posted a profit of $168 million in the most recent quarter that ended December 31. Even with the bad weather that made for a general rough patch over the Christmas travel period, Air Canada still managed to generate positive results. Revenue was 2% higher than for the same period in 2019, indicating the airline is bouncing back somewhat from the down-trend that dates to the beginning of the SARS-Cov-2 crisis.

Date: February 17, 2023

Source: ctvnews.ca

Link: https://www.ctvnews.ca/business/air-canada-posts-q4-profit-offering-new-optimism-after-tough-year-for-airline-1.6278657

Discussion points:

1) Have you flown since the pandemic started? How was your experience?

2) Do you think Canada has too many airlines?

3) Page 12-24 of Wiley’s Managerial Accounting: Tools for Business Decision-Making talks about an important performance measure for airlines such as Air Canada and WestJet. What is this measure and why do you think it is such a key metric in the industry?

Posted February 13th, 2023 by Brent White & filed under Accounting Theory, Advanced Accounting.

Description: The Canadian division of retailer Bed Bath and Beyond is seeking protection under Companies’ Creditors Arrangement Act. The US parent company has been experiencing financial problems of its own, declaring it cannot provide the type of support the Canadian operation requires. The company has around 400 full-time employees in Canada with another 1,000 or so part-timers who stand to be affected.

Date: February 10, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/bed-bath-beyond-canada-going-out-of-business-closing-54-stores-1.6745092

Discussion points:

1) How many of your classmates have shopped at Bed Bath and Beyond? What is their general impression of the business?

2) What do you think are some of the factors that caused Bed Bath and Beyond to fail?

3) Pages 2-8 and 2-9 of Wiley’s Understanding Financial Accounting discuss the going-concern concept. Why is this concept important in financial accounting?