Description: Retail is a very competitive industry, with companies perpetually seeking cost advantages over competitors. Walmart has often been seen as the leader in this respect, long renowned for its integration with suppliers and just in time deliveries. This week Walmart announced it would introduce a self-scanner for consumers to use in 22 of its Canadian stores to help it face competitive forces. With customers supplying Walmart with this “free” checkout labour, its probably bad news for Walmart workers.
Date: October 24, 2017
1) In problem 9-11A, page 508 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can find a comparison of Walmart and Target, along with an invitation to calculate a few key ratios. Which company appears to be the leader?
2) As a consumer, how do you feel about contributing your own labour to assist in the checkout process? What are the pluses and what are the minuses?
3) What are the implications for the replacement of jobs by new technologies?
Description: In 1984, Paul Newman turned over his Rolex watch to his daughter’s college boyfriend, James Cox, all because Cox told Newman he didn’t have a watch when Newman asked him the time. The watch had been a gift from Newman’s wife, Joanne Woodward, during the filming of a 1960s race car movie. This past week, the watch sold for a record $17.8 million at auction, proceeds going to benefit the Nell Newman Foundation.
Date: October 27, 2017
1) What determines the price customers are willing to pay for a one-of-a-kind auction item such as Paul Newman’s Rolex watch?
2) Wiley’s Financial Accounting: Tools for Business Decision Making discusses various costing models for inventory in Chapter 6. If you were a dealer in luxury goods, such as Rolex watches, what costing model would you be likely to adopt?
3) Notice from the article that the proceeds from the watch benefited a charitable foundation. Which of Wiley’s accounting textbooks – featured under the banner Canadian Accounting Products accompanying this article – would provide you with guidance on the accounting considerations for not-for-profit organizations?
Description: Loblaws has announced that roughly 500 administrative staff will be laid off in a cost-cutting move. Loblaws stated the cost cutting is to help cope with rising costs – perhaps such as an increase in the minimum wage. As well, the company cited increasing competitive forces as another reason they had to give this bad news to 500 of its workers.
Date: October 16, 2017
1) Wiley’s Financial Accounting: Tools for Business Decision Making discusses Loblaws in one of its feature stories. Can you find any subjects in this feature story that might show other areas where a managerial accountant could find cost savings for Loblaws?
2) Think for a moment about being a CFO in a large corporation. How would you break the news of layoffs to your staff?
3) What do you think may be some of the chief competitive forces Loblaws is referring to in the article?
Description: It has taken about eight years – including an attempt earlier this past summer – but New Brunswickers finally know that their provincially owned electrical utility paid roughly $1.7 million in severance to David Hay, the organization’s former CEO. In 2010 Hay abstained from a vote by the board of NB Power to sell the utility to Hydro Quebec, and he abruptly resigned with only a day’s notice. The provincial government had maintained for years that it could not reveal the size of the severance due to confidentiality.
Date: October 17, 2017
1) The article speaks of a court decision which required the NB government to reveal severance payments. What do you think of this decision? Are you in favour of it?
2) As a citizen, do you think all salaries and related payments to government employees should be available for all to see?
3) Where would a Crown corporation like NB Power account for a payment like this in its financial statements?
Description: It was a sad day for Canadian music on Wednesday as we found out about the death of Tragically Hip front-man Gord Downie. At only 53 years old he leaves behind a family, friends and many, many fans. He used his own experience with a brain tumor to raise awareness around a deadly form of disease. Even the Prime Minister took time to reflect on his life and contributions
Date: October 18, 2017
1) Were you or any of your friends fans of Mr. Downie? If so, what appealed to you?
2) What is your major source for listening to music today? How are some of the new ways of obtaining our music changing the methods by which musicians are compensated?
3) One of the facts that emerged about Mr. Downie was his sharing of the credit – or copyright – of the song writing with all the band members of the Tragically Hip. Wiley’s Financial Accounting: Tools for Business Decision Making discusses various types of assets. Where can you find discussion of copyright in this book? What classification of assets does copyright fall under?
Description: As if there wasn’t enough disquiet on the taxation front, this week things went a bit wild on the whole issue of employee discounts. You know, you work at a restaurant and you get a free meal. Or perhaps you work part-time at a sporting goods store, so your boss gives you 20% off on your new skates or running shoes. For a few days this week, it looked like that benefit was going to be taxable. But late in the week, it seemed as if the politicians were backing away from the whole plan, laying the blame on civil servants at the Canada Revenue Agency.
Date: October 13, 2017
1) Wiley’s Auditing: A Practical Approach provides definitions for various types of audits. What kind of audit do auditors of employee discounts do?
2) Why do you think the political level seemed to shift the blame to the civil servants at the CRA?
3) Do you think this incident might impact recruiting efforts by the CRA?
Description: Friday CBC revealed that Federal Finance Minister Bill Morneau waited two years before he disclosed his ownership stake in a company that owns a villa in Provence, France to the ethics commissioner. A spokesperson for Mr. Morneau stated the oversight was simply the result of “early administrative confusion,” though CBC noted that the disclosure did not occur until CBC began asking questions. The opposition parties are not buying that administrative confusion explanation. The timing probably couldn’t have been worse for the wealthy Finance Minister who finds his plans to change the tax regime for small business owners under attack.
Date: October 13, 2017
1) Do you think the timing of this disclosure will cause the Liberal administration to revisit its planned tax changes?
2) Do you see Mr. Morneau’s delay in reporting as an ethical issue?
3) Wiley’s Auditing: A Practical Approach provides definitions for discusses various types of audits. Do you see any type of audits listed in Chapter One that an ethics commissioner might use to ensure political leaders were filing their documents properly?
Description: Did that article really say $31 billion? That’s the estimate of the amount of food waste in Canada each year, everything from carrots with two roots to tomatoes that are a bit too ripe. But thankfully, someone is trying to do something about it. Chef Karen Barnaby of the Greater Vancouver Food Bank is gathering up the rejected food in her area and turning it into delicious dishes.
Date: October 6, 2017
1) What impressed you about this article?
2) Why do you think we are throwing out so much food in this country?
3) What might be some management accounting techniques you could use to develop a cost estimate for food waste if you worked for a major grocery retailer?
Description: For the second time, New Brunswick Auditor General Kim MacPherson has audited a 2009 decision by the then Liberal government to grant over $60 million in loan guarantees to the construction company Atcon. When the floundering firm failed, the province’s citizens were on the hook for the millions in lost funds while the then Premier, Shawn Graham, was found to be in a conflict of interest, his father having served as a board member on a Atcon subsidiary. The Auditor General questioned Atcon expenditures on the leases of a corporate jet and a luxury car, as well as payments for jewellery and vacation real estate in Aruba. With governance practices like this, perhaps it is no wonder some have decried New Brunswick as a failed state.
Date: October 3, 2017
1) Wiley’s Auditing: A Practical Approach provides definitions for various types of audits. What kind of audit do you think this audit of Atcon would be classified as?
2) Why do you think governments continue to provide financial assistance to business when the risks are so high at times?
3) Discuss the ethical implications of a Premier granting financial assistance to a company when his father served on the board of a subsidiary company.
Description: The television commercial for the new Google Pixel 2 phone shows a woman taking a bite out of an apple, and indeed, that not so subtle clue shows us some of what Google is up to. By launching a new phone ahead of Apple’s iPhone X, as well as two new digital assistants, the Home Mini and the Home Max, Google is battling both Amazon and Apple in the ongoing tech wars. Reviewers seem to like the Pixel Two. And if you want it, you better like it too, with prices starting at $899.
Date: October 3, 2017
1) Have you or any of your friends tried the Pixel 2?
2) Chapter 5 of Wiley’s Financial Accounting: Tools for Business Decision-Making speaks of how Apple increased the gross margin on the iPhone SE. See if you can find this example and discuss with your classmates what might be some other impacts on the gross margin.
3) What gross margin do you think Google might be earning on the Pixel 2?