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?

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?

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?

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?

Posted by & filed under eCommerce, Financial Reporting and Analysis, Marketing & Strategy.

Description: The stock price of Meta, Facebook’s parent company, has been tanking. On Thursday, the markets wiped out 20 percent of the big tech giant’s market valuation, following two quarter’s of revenue declines. Investors see former Facebook advertisers heading off to TikTok as one of Meta’s problems. Others see the billions of spending on the so-called metaverse initiative as a drain on Meta’s value.

Date: October 27, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/meta-facebook-zuckerberg-troubles-1.6631198

Discussion points:

1) What is your go-to social media application?

2) Do you think the metaverse strategy is a winning one for Meta?

3) Page 11-14 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses the dividend practices of Facebook. Has there been any change in this practice in the last year since the formation of Meta?

Posted by & filed under Marketing & Strategy, Student life.

Description: Loblaw is freezing its prices on approximately 1,500 store-brand “No Name” products until 31 January 2023. Some experts are labeling the freeze as a publicity move, something to blunt public and political rhetoric around profiteering by grocery giants. Another grocery chain, Metro, followed suit by announcing its own price freeze shortly after Loblaw made its announcement.

Date: October 18, 2022

Source:  ctvnews.ca

 Link: https://www.ctvnews.ca/business/critics-call-loblaw-price-freeze-a-pr-move-as-grocers-face-accusations-of-profiteering-1.6113983

Discussion points:

1) Do you buy No Name products? How about your classmates?

2) What do you think of the opinion that this may have been a publicity move?

3) Page 5-1 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses Loblaw’s supply chain and inventory management. What percentage of Loblaw’s current assets does inventory represent?

Posted by & filed under Student life.

Description: When Canadians are thinking sticker shock on oil, they are usually thinking about gas prices rising for their automobiles. But if you have been watching your grocery order closely, you may have noticed vegetable oil, a staple supply for the cupboard, has been rising at quite a rate. Statistics Canada data shows a 3 litre container of vegetable oil that cost $8.45 last August was now up to $12.01 in August 2022. That’s an increase of over 40%.

Date: October 20, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/canada-food-prices-inflation-vegetable-oil-1.6621673

Discussion points:

1) How many of your classmates have noticed this price hike in vegetable oil? Has it impacted your meal preparation?

2) What factors do you think are most likely to have caused the price trend?

3) Chapters 3 and 4 of Wiley’s Auditing: A Practical Approach deal with the Risk Assessment Phase of a financial statement audit. What might be some examples of audit clients or auditees where risk could be impacted by a 40% increase in the price of vegetable oil?

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

Description: Elon Musk says that if he completes his planned acquisition of Twitter, then up to 75% of the employees could get their pink slips. Analyst Dan Ives stated that a 75 per cent cut in Twitter’s staff would create “stronger free cash flow and profitability,” both of which could attract investors to Musk’s deal. Of course, Ives tempered this view with the notion that “you can’t cut your way to growth.”

Date: October 21, 2022

Source:  cbc.ca

 Link:https://www.cbc.ca/news/business/elon-musk-twitter-1.6624859

Discussion points:

1) Are you a Twitter user? How many of your classmates use it regularly?

2) If you were an accountant working at Twitter, how would this news impact your morale?

3) Pages 14-20&21 of Wiley’s Financial Accounting: Tools for Business Decision-Making discuss the performance measure Free Cash Flow. How is this measure calculated?

Posted by & filed under Financial Reporting and Analysis.

Description: Perhaps it will appeal to some customers in these inflationary times; Netflix is offering Canadians a reduced monthly rate of $5.99. The catch is you have to be willing to put up with about five minutes of ads each hour in exchange for your rate reduction. The move seems to fly in the face of Netflix’s previous claims that it would not resort to commercials, an approach it used to build its brand. The pressure from Wall Street to stem the loss of subscribers could explain the shift in policy.

Date: October 13, 2022

Source:  thestar.com

 Link: https://www.thestar.com/business/2022/10/13/netflix-canada-launches-ad-supported-tier-for-599-on-nov-1.html?source=newsletter&utm_content=a05&utm_source=ts_nl&utm_medium=email

Discussion points:

1) How many students in your class are Netflix subscribers?

2) Will this change impact whether or not you subscribe to Netflix? Do you think this is a good marketing decision?

3) The Accounting Matters inset box on page 11-19 of Wiley’s Financial Accounting: Tools for Business Decision-Making details movements and stock splits in Netflix’s shares since the company made its first public offering in 2002 up until July 2015. As a class research project, track Netflix’s stock splits since 2015 and its current stock price.

Posted by & filed under Contemporary Business Issues, Ethics.

Description: Mackenzie Irwin of the firm Samfiru Tumarkin LLP in Toronto, practices in the area of employment law. Irwin observed that over the pandemic, with so many working remotely, some employers began tracking employee activity online, trying to sift out the YouTube time-wasting from the spreadsheet work. But starting Tuesday, the Working for Workers Act means employers in Ontario cannot watch their employees in secret any longer, perhaps unleashing significant morale issues in the workforce.

Date: October 11, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/canadians-workers-employers-tracking-1.6612228

Discussion points:

1) Do you know if your employer has ever used electronic monitoring on you?

2) How would you respond if you found out your employer was monitoring you this way?

3) On page 7-3 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a discussion of how employers make cashiers accountable for their cash drawers by assigning responsibility, a widely-accepted technique for checking employees to ensure no money goes missing. Why would this technique of supervision be considered acceptable whereas many would protest about the notion that their employer could now tell when a co-worker is surfing online instead of working?