Description: The merger of Potash Corp and Agrium Inc is complete and the new company, Nutrien Ltd, started trading its shares this week. The new mega-enterprise stated the merger was to help it compete in face of declining prices in the potash business. But some Saskatchewan politicians fear that the merger might mean that good head office jobs may flee the province as the newly structured fertilizer producer moves forward.
Date: January 3, 2018
1) Wiley’s Advanced Accounting: Updated Canadian Edition (Fayerman), discusses various types of business combinations and inter corporate investments. How do you think Potash Corp and Agrium’s combination would fit with the framework Fayerman writes about?
2) What do you think of this merger as a strategic move to deal with declining potash prices?
3) What type of accounting information might Nutrien Ltd. need in order to determine where it will locate its business functions?
Description: On December 6, many gathered in Halifax for a special ceremony commemorating the 100th anniversary of the Halifax Explosion. On December 6, 1917, two ships collided in Halifax harbour. One of them, heavily loaded with munitions, caught fire and soon exploded, leveling neighborhoods, killing approximately 2,000 people, and injuring many more. Professor Jack Rozdilsky of York University says the Explosion provides an important reminder of the nature of risk in our society.
Date: December 6, 2017
1) Did you watch or read anything this past week about the Halifax Explosion?
2) How could accounting information help us learn to prevent accidents?
3) How can auditors and accountants help organizations in assessing their risks?
Description: December 9 was International Anti-Corruption Day. The United Nations website tells us that each year $1 trillion is paid in bribes around the globe while thieves make off with $2.6 trillion stolen through various corrupt methods. These figures far outstrip the amount of development aid targeted to nations.
Date: December 9, 2017
1) Were you surprised by the extent of the corruption worldwide?
2) Click on the what you can do link and discuss with your class what measures are effective. http://www.anticorruptionday.org/actagainstcorruption/en/about-the-campaign/what-can-you-do.html
3) On page 13 of Wiley’s Auditing: A Practical Approach, you can read about the emerging area called Corporate Social Responsibility assurance. Do you believe that if this area of practice became more common it might help reduce corruption?
Description: Well, having about 90% of your compensation based on bonus incentives for reaching performance targets might seem a bit risky. But don’t feel too bad for NFL Commissioner Roger Goodell. His new five year contract could pay him up to $200 million. The NFL owners have been concerned about recent declines in television viewership and want to ensure Goodell focuses on growing the sport’s $14 billion in revenue.
Date: December 6, 2017
1) Why do you think the NFL television ratings are declining? How will this impact the league’s revenues?
2) If you were structuring a contract for an executive of a sports league, how would you set it up? How much would you put in base salary? How would you structure the bonus targets?
3) On page 359 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can see a reference to the CFL’s Calgary Stampeders. Try to find out the total revenues of the CFL to see how this figure compares to the NFL’s $14 billion.
Description: With traditional news media in decline, Facebook is joining with Ryerson University to encourage start-up innovation in this industry. The program will target five startup companies to see how these new players might innovate within this important tech space. It will be interesting to see how this incubation experience might lead to genuine breakthroughs to deal with the disruption in the media space.
Date: November 28, 2017
1) If you were proposing an idea to be funded in this partnership what would it be?
2) Wiley’s Financial Accounting: Tools for Business Decision Making, notes that investors purchase Facebook shares “with the hope that the share price will increase in value and they will realize a gain when they sell their shares” (see page 597). Given this situation, what financial ratios would these investors be interested in?
3) In Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about how Brian Fernandez used Facebook to start a movement in favour of French’s ketchup. Find this reference and discuss the reasons Mr. Fernandez succeeded.
Description: Cyber Monday has now overtaken Black Friday as the biggest day on the holiday shopping calendar. The online phenomenon has grown so huge that actually the Tuesday after Cyber Monday is now the second largest holiday purchase day in the United States. Accounting firm Deloitte indicated that 50% of consumers now seem to prefer online shopping as their favoured method versus 36% who like the old bricks and mortar over the cyber shopping solution.
Date: November 28, 2017
1) Were you a Cyber Monday shopper? Why or why not?
2) Why do you think Cyber Monday has grown so huge? Did it surprise you to learn that it has overtaken Black Friday?
3) In Wiley’s Auditing: A Practical Approach you can learn about risk assessment on audits. If you were the auditor of an online retailer what might be some risks associated with Cyber Monday?
Description: Bitcoin, perhaps the most widely known of the crypto-currencies, has been all over the map in terms of value, with many highs and lows over its relatively short life. But in recent days Bitcoin has been soaring in value, rising over $11,000 per unit last week. Despite this possible bubble, central bankers are providing reassurances that the amount of Bitcoin available is too small to endanger economic stability, should there be a sudden crash.
Date: November 29, 2017
1) On page 367 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you will see a short discussion titled What is Cash? Do you think Bitcoin should be accounted for as cash on a company’s statement of financial position?
2) Why do you think Bitcoin is soaring so high these days?
3) Would you be interested in investing in Bitcoin is you had a few thousand?
Description: Well, that’s one way to handle your backlog of calls: simply drop them. This past week the Auditor General of Canada reported his Office’s findings regarding the poor job that the Canada Revenue Agency does in handling calls from Canadian citizens. In addition, the report said that there is no quick fix in sight for the beleaguered Pheonix payroll system.
Date: November 21, 2017
1) Have you or any of your classmates had a summer job with the federal government? What have the experiences been like? That is, have any of you had a bad experience with the Phoenix system?
2) Have you ever tried to phone the CRA about your tax return? What was your experience like?
3) How do you think the Auditor General’s work can be used to improve government services?
Description: Meanwhile, in Nova Scotia, Premier Stephen McNeil questioned the findings of provincial Auditor General Michael Pickup regarding a shortage of physicians in Nova Scotia. The Premier appeared to be saying that Mr. Pickup had strayed into the policy field in his audit of doctor shortages in Nova Scotia. He noted that if the Auditor General wanted to make policy, he was free to run in the next provincial election. The opposition parties did not appear to see things quite the same way.
Date: November 23, 2017
1) In Wiley’s Auditing: A Practical Approach, Section 1.3 discusses a variety of assurance services. In which category would Mr. Pickup’s discussion of the doctor shortage fit?
2) Do you think Mr. Pickup may have strayed into the policy area with this audit? In other words, are the Premier’s comments justified?
3) Would you be interested in being an auditor general at some point in your accounting career?
Description: Last week this blog noted how Montreal is moving ahead with the aerospace industry. This week, Montreal is in the spotlight again. RBC is investing in an AI (artificial intelligence) laboratory in Montreal, building on its business efforts with this technology in Edmonton and Toronto.
Date: November 21, 2017
1) What examples of AI are you familiar with?
2) Why has Montreal become such a valuable centre of AI?
3) How do you think AI will impact employment in the accounting field?