Wiley Accounting Updates

Posted November 13th, 2023 by Brent White & filed under Accounting Principles, Student life.

Description: It’s hard to figure out what’s going on these days in the job market. One day, restaurants and retailers are jamming their windows with help wanted signs. Then, you turn around and find retail giant Canadian Tire is laying off three percent of its workforce, citing declines in business as prompting the move. Reports say job postings for Christmas season jobs, a normally vibrant time in the retail business, are down 30 percent this year.

Date: November 9, 2023

Source: ctvnews.ca

Link: https://ottawa.ctvnews.ca/analysts-warn-more-companies-will-layoff-staff-as-canadian-tire-cuts-employees-1.6638732

Discussion points:

1) Have you ever had a Christmas season retail job during your time at university?

2) Do you see a lot of job postings or help wanted signs in your university town?

3) Page 8.1 of Wiley’s Understanding Financial Accounting discusses Canadian Tire’s long-term assets. What intangible assets are owned by Canadian Tire?

Posted November 13th, 2023 by Brent White & filed under Accounting Careers, Student life.

Description: According to Canada Helps, Canadians make 30% of their charitable donations in December. A survey by AFP Foundation for Philanthropy found that Canadians would give more if they were better informed around the impacts that their donations help achieve. Brad Offman, CEO at an organization that provides consulting services to charities, says that “there’s no definitive answer to (measuring impact).” Offman notes that assuming low administration costs equals high impact is not valid.

Date: November 6, 2023

Source: thestar.com

Link: https://www.thestar.com/business/personal-finance/is-the-money-you-donate-to-charity-being-used-the-way-you-think-how-to/article_4639b4c3-4b91-5e8a-aa85-f76ce0f0bec0.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) How many of your classmates make charitable donations each year?

2) Do you have any personal selection criteria for making charitable donations?

3) Page 7-27 of Wiley’s Understanding Financial Accounting discusses some of the work of the Daily Bread Food Bank. If you were a financial officer or a board member at this food bank, what might be some of the things you would recommend the organization use to measure its impact?

Posted November 6th, 2023 by Brent White & filed under Fraud.

Description: Sam Bankman-Fried has been found guilty of fraud for his actions around cryptocurrency company FTX. The jury deliberated for three days after a trial that lasted about a month. U.S. attorney Danielle Sassoon characterized Bankman-Fried as using customers money as a “personal piggy bank.” For his part, Bankman-Fried testified in his own defence that he did not commit fraud.

Date: November 2, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/world/bankman-fried-convicted-1.7017241

Discussion points:

1) Have you or any of your classmates invested in a cryptocurrency? If so, how was your experience?

2) Have you ever been the victim of a fraud?

3) Illustration 7.2 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses the fraud triangle. What are the three factors present in the fraud triangle?

Posted November 6th, 2023 by Brent White & filed under Accounting Careers, Accounting Principles, Student life.

Description: The Royal Bank of Canada (RBC) has reached an $8 million settlement that will see it pay out this total, split among three different securities regulators. The Ontario Securities Commission Capital Markets Tribunal approved the settlement for RBC’s control weaknesses in differentiating between capital and operating expenditures in software development. RBC offered that the control deficiencies have been corrected.

Date: November 3, 2023

Source: winnipegfreepress.com

Link: https://www.winnipegfreepress.com/business/2023/11/03/osc-tribunal-approves-10m-settlement-over-rbc-accounting-practices

Discussion points:

1) Which bank seems to be the most widely used by you and your classmates?

2) Though the article does not have a lot of detail, what do you think may have caused this problem?

3) Pages 9-3 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses the difference between operating and capital expenditures. How would explain the difference to a friend who was not studying accounting?

Posted November 6th, 2023 by Brent White & filed under Accounting Careers, Auditing, Ethics.

Description: In what could be described as somewhat of an embarrassment, Big Four audit firm Deloitte has been fined $1.59 million by CPA Ontario, the governing body for the accounting profession in that province. Deloitte’s problem was that some employees engaged in “deliberate backdating” of audit working papers on close to 40 audits. Somehow the auditors were able to work around the software controls to backdate work to make it appear it was performed or reviewed earlier than in reality. CPA Ontario said “Backdating obscures when and what work was performed and reviewed,” creating “questions about the accuracy or timeliness of audit documentation and the quality of the audit.”

Date: November 2, 2023

Source: thestar.com

Link: https://www.thestar.com/business/deloitte-fined-1-59-million-by-ontario-regulator-after-some-employees-altered-computer-clocks-to/article_561fe53c-f68b-5089-9e46-fc7f533e2d2f.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) As someone studying accounting, how might this story impact your choice of employer after graduation?

2) The story tells us Deloitte became aware of the problem in March 2018, reported it to CPA Ontario in September 2019, and reached the settlement last week. What opinion do you have on this timeline?

3) Pages 10-10 of Wiley’s Financial Accounting: Tools for Business Decision-Making mentions Deloitte in the Analytics Mindset inset box. What does this section tell us regarding Deloitte?

Posted October 30th, 2023 by Brent White & filed under Data security, Internal control, Student life.

Description: If online security were a university course, many Canadian post-secondary students would have a failing grade, at least according to survey results from RBC’s Students and Fraud Poll. Eighty percent of the students admit to vulnerabilities, including 28% who had shared their passwords on debit and credit cards. With fraudsters becoming more resourceful, it’s time for students to step up by improving their own security measures.

Date: October 23, 2023

Source: thestar.com

Link: https://www.thestar.com/business/canadian-students-receive-failing-grade-for-fraud-prevention-and-sharing-passwords-new-survey-finds/article_43d5b7ce-c18c-52bf-970e-4439cf076138.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) Have you or your classmates ever been scammed in regard to your own banking information?

2) What tips do you have for protecting your cards, bank apps, and other important elements of your own financial life?

3) Illustrations 7.3 and 7.4 of Wiley’s Financial Accounting: Tools for Business Decision-Making show us control activities over cash receipts and cash disbursements? Which of these do you think can be adopted by students in looking after their own cash?

Posted October 30th, 2023 by Brent White & filed under Accounting Principles.

Description: Electronics retailer Best Buy is recalling one million pressure cookers after 17 customers have experienced burns. Best Buy will not provide replacements or refunds if your return the item to the store. Rather, the company insists consumers register online to receive satisfaction.

Date: October 27, 2023

Source: ctvnews.ca

Link: https://www.ctvnews.ca/business/best-buy-recalls-nearly-1-million-pressure-cookers-after-reports-of-17-burn-injuries-1.6620286

Discussion points:

1) Have you ever had a consumer item that was recalled due to a safety issue?

2) If you were a senior financial officer at a company in a situation like this, how would you advise management to proceed?

3) In chapter five of Wiley’s Financial Accounting: Tools for Business Decision-Making we saw a discussion on refund liabilities. On page 10-10 we see a discussion of a particular provision that would be germane to Best Buys. What is the example given there?

Posted October 30th, 2023 by Brent White & filed under Accounting Careers, Financial Accounting, Marketing & Strategy, Student life.

Description: Air Canada has been offering disgruntled customers cash or vouchers to settle their claims for travel interruptions. Thousands of Canadians have taken their disputes with Air Canada to the Canadian Transportation Agency (CTA), piling up a backlog of over 60,000 claims for compensation for disrupted travel and other matters. Air Canada maintains it pays customers who have legitimate claims and that is making these current offers to address the huge queue in the system. An Edmonton, Alberta university student, Samantha Smith, described Air Canada’s offer to her as “insulting,” noting she “felt very angry and just really dismayed” at what she saw as a low-ball offer from the airline.

Date: October 27, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/air-canada-compensation-claims-1.7008860

Discussion points:

1) Have you or your classmates ever filed a claim with the CTA about a disappointing airline experience?

2) What do you think about Air Canada’s strategy on this issue? Will it help them in the marketplace?

3) Pages 10-9 through 10-11 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses the subject of provisions and contingencies. What type of financial statement treatment do you think Air Canada should use regarding these claims at the CTA?

Posted October 23rd, 2023 by Brent White & filed under Accounting Careers, Sustainable Development.

Description: A&W appears to be taking a lead in environmental action by bringing to market an exchangeable beverage container through its new One Cup program. For a small $3 fee, the customers can receive this reusable cup that can be exchanged for a clean one each time they order their favourite A&W beverage. In addition, using the exchangeable cup also nets the customer a 20% discount. It’s all part of an effort to reduce the one billion cups hitting landfills in Canada each year from food vendors. A&W had shown similar leadership on this last year when it introduced a rather strange looking lidless cup suitable for composting. https://www.newswire.ca/news-releases/weird-looking-world-changing-a-amp-w-launches-canada-s-first-lidless-fully-compostable-coffee-cup–882596624.html

Date: October 16, 2023

Source: globalnews.ca

Link: https://globalnews.ca/news/10027312/aw-resusable-cup-program/

Discussion points:

1) What do you think about this new A&W xchangeable cup? Would you be willing to put your $3 down to join the program?

2) As someone looking forward to a career after graduation, does your potential employer’s environmental footprint have any influence on which company you might choose to work for?

3) Page 6-25 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses Lululemon’s voluntary reporting on how climate risk can impact its financial statements. The section notes that many companies do not have this type of voluntary disclosure on risks associated with client change. Do you feel that public companies should be required to report this type of information?

Posted October 23rd, 2023 by Brent White & filed under Internal control, Student life.

Description: According to Clint Mahlman, CEO of pharmacy chain London Drugs, despite a rise in violent shoplifting incidents in Vancouver, the business has no plan to close any stores in the city. “We are at a crisis point in retail,” Mahlman noted. The losses from theft amounts to “tens of millions” per year, and the safety of staff is a concern as well, given that workers have been physically assaulted, including with hatchets and knives.

Date: October 18, 2023

Source: globalnews.ca

Link: https://globalnews.ca/news/10034649/london-drugs-vancouver-shoplifting/

Discussion points:

1) Have you ever witnessed a violent theft or shoplifting incident at your university town?

2) If you were a senior financial officer at a firm like London Drugs, what type of information would you assemble to help executives make decisions on whether not to close locations?

3) Section 7.1 of Wiley’s Financial Accounting: Tools for Business Decision-Making offers descriptions of several types of internal control activities that businesses can employ. Which activities could be considered for a retailer facing theft problems and the related threats on employee safety?