Description: The Quidi Vidi Brewery is a good news/bad news story. After years of struggling, including a 1999 warning from their accountant about imminent bankruptcy, this Newfoundland craft brewery has seen a turnaround in more recent years, thanks in part to its Iceberg brand in its distinctive blue bottle. But the two founding investors are at odds with each other, and are fighting out the future of the company in court.
Date: March 24, 2017
1) Are you a fan of the craft brew industry?
2) What might have been some of the things the owners could have done to avoid this very public dispute?
3) What techniques might the auditors have used to discover those unrecorded sales from 2008?
Emma Walmsley is the first female CEO for giant pharmaceutical company GlaxoSmithKlein. A story from Bloomberg News this past week indicated that Ms. Walmsley would be earning less than her predecessor Andrew Witty. This compensation difference may add to the debate on pay equity, though observers point out that when he started, Mr. Witty was also paid less than the previous incumbent.
Date: March 14, 2017
1) As a commerce student, getting ready to enter the workforce, what is your perspective on the pay equity question?
2) Do you think accountants have a role to play in pay equity discussions?
3) What does accounting theory teach us about CEO compensation?
Description: Tim Horton’s franchise holders are upset with Restaurant Brands International (RBI), the famous cost-cutting owners of Tim Hortons and Burger King. The franchisees say cost cutting has gone too far, with stores now seeing inferior quality in such products as coffee pots, cup lids and trays. The Great White North Franchisee Association has been formed by a number of the franchisees in an effort to get RBI to respond to the quality concerns.
Date: March 14, 2017
1) Are you a Tim Horton’s regular on your way to class each morning? If so, have you noticed any of the quality issues?
2) If you were a managerial accountant at RBI assigned to cut costs, how would this action by the Great White North Franchisee Association impact your assignment?
3) Where can you read about Tim Horton’s in Wiley’s Kimmel, Financial Accounting: Tools for Business Decision-Making, Sixth Canadian Edition?
Description: TD Bank shares have taken a big drop following CBC reports on bank reps facing pressure to push products at customers. Just a few days before, banks were reporting higher than expected quarterly earnings. This bad publicity though may prompt some investors to take a look at TD bank shares.
Date: March 10, 2017; updated March 11
1) As a student, who do you bank with? What influences your choice?
2) Had you heard about this story? What is your response to it?
3) The CEO of TD Bank refers to “trust” in his response. We can’t put trust on the balance sheet, but what would it be worth to a bank?
Description: Unlike in the United States, Canadian securities regulators have blocked Canadian publicly traded companies from announcing important information first on social media. Canadian companies are required to report information first via the traditional press release. One concern regulators have is that an item could be posted to social media, and then taken down shortly after, thereby contrasting it with the traditional press release.
Date: March 9, 2017
1) As a commerce student, how do you get most of your business news?
2) Given your answer to question one, what do you think of the Canadian securities regulators’ decision?
3) Why do you think Canadians and Americans differ on their approach to social media?
Description: It’s not the type of news any company wants. This past week Swedish authorities arrested one Bombardier employee and briefly detained two others over allegations of bribery. The suspicions are that somehow Bombardier employees colluded with Azerbaijani officials in an effort to secure contracts in Azerbaijan.
Date: March 10, 2017
1) What kind of impact do you think this will have on Bombardier’s reputation?
2) As an accounting student, can you think of any controls that an organization might put in place to prevent or detect this type of incident?
3) Prime Minister Trudeau has said this incident will not impact the federal government’s assistance to Bombardier. What are your opinions on this position?
Description: It just doesn’t seem to make sense. Savers say they are being punished when it comes to getting that first mortgage. In the strange world of finance, it appears that home buyers who put down less than 20% of the house value are getting better interest rates than those who have been socking away their cash to provide a large down payment. So the poor savers are earning close to zero while they save their money and then they are apparently getting punished for finally borrowing when they make their purchase. It’s a funny world folks.
Date: March 9; updated March 10, 2017
1) What surprises did you have in reading this article?
2) Were you aware that the taxpayer essentially insures those mortgages with less than a 20% downpayment?
3) Are you planning on buying a home after graduating? What is your savings strategy?
Description: Accounting giant Price Waterhouse Coopers (PWC) took a big reputational hit at this past weekend’s Academy Awards. Millions saw it unfold on camera as somehow the PWC representatives delivered the wrong envelope for the best picture award. PWC has had a 83 year history of oversight of the awards process. It will be interesting to see how this very public incident impacts its brand.
Date: February 28, 2017
1) Were you watching the Academy Awards? What was your reaction to the envelope mix-up?
2) How do you think this will impact PWC’s reputation?
3) Are you an accounting student applying for work with CPA firms? Would an incident like this impact which firm you decide to choose?
Description: On February 13, 2017, this blog featured a piece called “Every 20 Years or So.” It dealt with auditing firm Deloitte’s appeal of court decision that it pay roughly $85 million in damages related to their involvement in audit of the failed Livent enterprise. Well, if you read that blog post, you may know what I mean when I say I have been talking with my lawyer friend again. He tells me that we can probably expect a number of months will pass before the court provides its decision. It all seems to take a long time for justice to have the final word on accounting and auditing decisions made in 1996 and 1997. In the meantime, you can always watch a video of the hearing at the CPAC website (see the link below).
Date: February 15, 2017
1) Were you familiar with the issues in the Deloitte case? (If not, you can read a brief overview on page 54 of Wiley’s Auditing: A Practical Approach.)
2) How do you think a highly public court case like this impacts upon the professional image of an accounting firm?
3) Based on your reading of the matter, how do you think the Supreme Court might rule?
Description: Janet De Silva is the CEO of the Toronto Region Board of Trade. She recently offered several key observations about her career path and success. One particular piece of advice that stands out is don’t pretend you are an expert when you take on an overseas assignment.
Date: March 5, 2017
1) As a university student looking forward to entering the workforce, what was your biggest takeaway from this article?
2) Were you encouraged to read that business leaders are saying there is a talent shortage? What are you doing to help fill that need?
3) Do you have an interest in working internationally like Janet De Silva did? What do you think your university education can do to prepare you for that option?