That’s a Big Fraud Doc!

Posted by & filed under Fraud.

Description: An Alberta physician, Dr. Yifei Shi, has been convicted in what has been called the largest doctor billing fraud in the province’s history. In addition to a four-year prison term, Dr. Shi will have to repay $827,077 to the province. Dr. Shi will also face scrutiny from the College of Physicians and Surgeons of Alberta, and the professional organization can permanently revoke her license to practice medicine.

Date: November 18, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/edmonton/family-physician-sentenced-largest-fraud-alberta-1.6655518

Discussion points:

1) As a tax-paying citizen, what is your reaction to this story?

2) Given that Canada appears to be suffering from a shortage of qualified medical professionals, do you think that the College should consider this in crafting its decisions for cases such as Dr. Shi’s?

3) In chapter 7 of Wiley’s Financial Accounting: Tools for Business Decision-Making we learn about the fraud triangle. What do you think may have been in play for each side of the fraud triangle in this situation?

Are Your Classmates’ Cars in Danger?

Posted by & filed under Accounting Principles, Student life.

Description: Zeynel Ari said that the time it took him to walk from a parking lot, into his bank, then back to the lot, was all the time it took for thieves to grab his vehicle. Car theft rings are getting better at their illegal craft, with the number of stolen vehicles in Ontario rising for five straight years. One secret to their success has been adopting technology that lets them steal electronic key fob signals from unsuspecting motorists, opening the door and the ignition to these unwelcome intruders.

Date: November 14, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/toronto/top-10-stolen-cars-ontario-2021-1.6649053

Discussion points:

1) How many of your classmates drive one of the “top ten” cars mentioned in this article? How many have had a theft or break-in?

2) What do you think are some of the best measures to prevent a theft or break-in of an automobile?

3) In chapter 9 of Wiley’s Financial Accounting: Tools for Business Decision-Making we learn about derecognition of property, plant, and equipment (see section starting on page 9-18). What are the four steps involved in disposal? How might these be impacted by the theft of a vehicle?

Insolvencies Up

Posted by & filed under Accounting Principles, Student life.

Description: Insolvencies in Canada were up 22.5% over the same quarter last year. Statistics Canada said this was the largest year-over-year increase in 13 years. During the pandemic, a number of government programs seemed to have helped businesses and consumers to avoid this level of financial difficulty. But the rise of inflation, increasing interest rates, and the end of pandemic subsidies have created added financial pressure on Canadians.

Date: November 9, 2022

Source:  thestar.com

 Link: https://www.thestar.com/business/2022/11/09/consumer-insolvencies-rise-225-per-cent-compared-with-last-year.html?source=newsletter&utm_content=a13&utm_source=ts_nl&utm_medium=email

Discussion points:

1) As you read the article, did it cause you to reflect on your own financial situation at school this year?

2) What do you think might be the single largest factor contributing to the rise in insolvencies?

3) Starting on page 8-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a section on Uncollectible Accounts Receivable. What aspects of this news story might a company have to take into account as it considers its bad debt expense calculations?

Silence at Sobeys

Posted by & filed under Accounting Careers, Accounting Principles.

Description: Sobeys has gone virtually silent in the face of an apparent data breach last week. Customers at Sobeys and other related Empire Company stores, found themselves unable to process transactions normally. Problems included filling prescriptions at the pharmacy. Another food company, Canada Packers, also had similar problems last week, but it took a different tack, choosing to go public with news that it was victim of an attack.

Maple Leaf Foods Confirms System Outage Linked to Cybersecurity Incident

Date: November 9, 2022

Source:  globalnews.ca

 Link: https://globalnews.ca/video/9266721/empire-remains-silent-about-it-problems-that-impacted-sobeys-other-stores/

Discussion points:

1) Why do you think Sobeys and Maple Leaf had such different responses to similar problems?

2) If you were a senior accounting officer at a company, how would you advise your colleagues to respond to a security breach?

3) Starting on page 7-8 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a discussion of the limitations of internal control. Which of these limitations might be most responsible when a company has an incident like Maple Leaf or Sobeys?

No Gold Here

Posted by & filed under Accounting Careers, Financial Reporting and Analysis.

Description: Did you know that the Bank of Canada, unlike central banks in a number of other nations, does not hold any gold reserves? About twenty years ago the Bank sold off all of its gold holdings, claiming the cost of holding gold and the higher returns available from foreign bonds made gold a bad investment. On the downside, the value of gold has increased by about 600% during this time while bond returns have plummeted.

Date: November 11, 2022

Source:  thestar.com

 Link: https://www.thestar.com/business/opinion/2022/11/11/canada-should-rebuild-the-gold-reserves-it-sold-off-in-the-2000s-while-thae-us-dollar-is-strong.html

Discussion points:

1) What do you consider as the most interesting thing you learned from reading this article?

2) If you were a financial advisor within the Bank of Canada would you advise the Bank to begin building up gold reserves once again?

3) In chapter 2 of Wiley’s Financial Accounting: Tools for Business Decision-Making we learn about the classified statement of financial position/balance sheet. If a company was holding gold, where would it appear on the classified statement of financial position?

A Good Month for Jobs

Posted by & filed under Auditing, Canadian Economy, Student life.

Description: October was a good month for the Canadian economy with 108,000 new jobs added, exceeding projections by a factor of ten. Because more Canadians were actually looking for work last month, the unemployment rate remained steady at 5.2%. Despite the good news on the employment front, a higher number of Canadians report having trouble making ends meet. Economist Tu Nguyen notes that “people who are lower income, who struggle the most, are not getting the gains” that would help them deal with the pressures of inflation.

Date: November 4, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/canada-jobs-october-1.6640437

Discussion points:

1) What seems to be happening with employment opportunities in your university town? What’s your feeling on how the local economy is doing?

2) What are some strategies students might use to help deal with the impact of inflation?

3) Page 3-10 of Wiley’s Auditing: A Practical Approach discusses how an auditor assesses broad economic factors in gaining an understanding of the client or auditee. What might be some economy-level considerations an auditor would consider in this current climate?

Tax on Stock Buybacks

Posted by & filed under Financial Reporting and Analysis, Student life.

Description: The federal government is set to introduce a 2% tax on stock buybacks. The government hopes this move will encourage companies to reinvest their profits in order to grow and benefit the Canadian economy, rather than buying back shares with excess cash. Kim Forrest of Bokeh Capital Partners does not believe the 2% penalty will be enough to influence behaviour.

Date: November 4, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/ottawa-stock-buyback-tax-1.6639713

Discussion points:

1) Does your university have an investment club or dedicated investments course where you trade in real money? If so, has the fund benefited from stock buybacks?

2) Do you think the government should do something to discourage stock buybacks?

3) Page 11-9 of Wiley’s Financial Accounting: Tools for Business Decision-Making talks about stock buybacks in Canada in the inset box “Accounting Matters.” Which Canadian company was the leader in this practice according to the inset box?

Private Equity Firm Buying Rona

Posted by & filed under Financial Accounting.

Description: Sycamore Partners, a private equity firm located in New York, is buying retailer Rona, along with several related parties, from Lowes. Lowes said it is making the sale in a move to simplify its business model. Sycamore is paying $400 million for the deal along with additional compensation that will depend upon performance.

Date: November 3, 2022

Source:  globalnews.ca

 Link: https://globalnews.ca/news/9251295/lowes-rona-selling-private-equity-firm/

Discussion points:

1) As you read the article, did you consider how much the value of Rona had changed since Lowes first purchased it?

2) What factors may have been behind the change in value for Rona since Lowes purchased it in 2016?

3) Starting on page 11-22 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a discussion of the shareholders’ equity section of the balance sheet. What options are available to a privately held company that are unavailable to a publicly traded company?

Health Benefits Bring Workers

Posted by & filed under Accounting Careers, Marketing & Strategy.

Description: Restaurant employees have long been used to working without employer sponsored health benefit plans. But in this time of staff shortages, restaurateurs, such as Calgary’s Antonio Migliarese, are seeing health and dental benefits as way to attract and retain a quality staffers. As line cook Maddy Vine states, in “an industry that’s all about taking care of other people, it doesn’t make sense to not take care of your employees.” For an industry short of thousands of workers, it will be interesting to see how this strategy unfolds.

Date: October 28, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/calgary/restaurant-industry-health-benefits-1.6630367

Discussion points:

1) Have you ever worked in a restaurant? Did you have health and dental benefits?

2) What other strategies might the restaurant industry use to attract employees?

3) Page 1-2 of Wiley’s Financial Accounting: Tools for Business Decision-Making introduces us to George Melville of Boston Pizza International. Do you think it would be easier to introduce health benefits at a large restaurant chain like this, or at a smaller locally-owned restaurant?

Phoenix Problems Persist

Posted by & filed under Auditing, Canadian Government.

Description: Well, the good news is that only 28% of federal government employees had an error in their pay during the fiscal year ended 31 March 2022. According to the federal auditor general, that is down from 47% in the prior year, indicating that, although results have improved, the maligned Phoenix pay system is far from working smoothly. The auditor’s commentary also noted that “despite the pay centre’s significant efforts since 2016, the level of outstanding requests has started to rise.” Further, the government needs to move faster on collection of $500 million overpayments to federal employees. With half of these claims at least three years old, the government risks moving into murky legal territory on the collection efforts.

Date: October 27, 2022

Source:  ctvnews.ca

 Link: https://ottawa.ctvnews.ca/federal-government-must-collect-500m-in-overpayments-to-public-servants-ag-1.6127691

Discussion points:

1) Have you or any of your classmates been impacted by Phoenix pay problems?

2) What do you think went wrong with the implementation of the Phoenix payroll system?

3) Chapter one of Wiley’s Auditing: A Practical Approach provides definitions of several types of audits. Which type of audit did these Phoenix findings come from?