Posted by & filed under Accounting Careers, Internal control.

Description:   Nova Scotia MLAs on the Public Accounts Committee were looking for answers this week in terms of what had gone wrong at the IWK Health Centre. Several months ago the former CEO and CFO of the region’s largest children’s hospital were charged for their handling of expense account issues. In further questioning, MLAs zeroed in on purchasing practices. They also expressed concerns about the government’s imposition of new limits on the Committee’s line of questioning and its meeting frequency.

Date:  February 06 , 2019; updated February 07, 2019

Source:  ctvnews.ca

Link: https://atlantic.ctvnews.ca/mlas-question-iwk-officials-on-finances-after-expenses-scandal-1.4285255

Discussion points: 

1) In taking a look at this article, what do you see as the biggest control weakness at the IWK Health Centre?

2) When you think about how the IWK is a high-profile fund raiser in the community, staging well-publicized efforts to raise money from the public, what would you do if you were the new CFO at IWK to establish trust?

3) What component of an internal control system do you see as the most important for the IWK right now? See page 360 in Wiley’s Financial Accounting: Tools for Business Decision-Making. 

Posted by & filed under Ethics.

Description:    This past week, Parliament was dominated by just what Justin Trudeau may – or may not – have done to intervene in the so-called Lavalin affair. If we look at SNC-Lavalin’s recent history, however, we quickly realize the engineering firm is no stranger to controversy. The stakes are high in the charges it faces regarding the corruption scandal in Libya. If found guilty, SNC-Lavalin will be barred from federal government contracts for 10 years.

Date:  February 08 , 2019

Source:  cbc.ca

Link: https://www.cbc.ca/news/canada/snc-lavalin-corruption-fraud-bribery-libya-muhc-1.5010865

Discussion points: 

1)Were you aware of the SNC-Lavalin story in the current news? What was your reaction?

2) If you were the CFO of a company, and you found out that Lavalin was one of the bidders on a contract your company had put out for bids, would you think twice about awarding it to them ?

3) See page 134 in Wiley’s Financial Accounting: Tools for Business Decision-Making. What is the difference between an error in the financial statements and fraud?  

Posted by & filed under Corporate Strategy.

Description:   Really – no really – apparently there was a time when airline travel was fun. One of the things that has taken some of the fun out of flying is the growing bevy of fees. Fees for Luggage. Fees for a cold beverage. More fees to pick your seat. All these fees keep creeping into our wallets. Now Southwest Airlines, a long-time no frills flight provider, has fuelled speculation it may be searching for extra fees after its CEO said revenue was “under construction.” Baggage fees alone generate billions in revenue for US airlines.

Date:  February 08 , 2019

Source:  latimes.com

Link: https://www.latimes.com/business/la-fi-southwest-airlines-fees-20190208-story.html

Discussion points:

 1) Have you ever wondered where all these extra fees come from? What do you think has prompted a strategy for airlines to lower their base fares and crank up the extra fees?

2) If you were an accountant advising Southwest Airlines on what extra fees it might charge, what type of data would you perhaps provide?

3) Take a look at the vignette about Westjet on page 463 of Wiley’s Financial Accounting: Tools for Business Decision-Making. See if you can find an extra fee Westjet created to generate additional revenue.

Posted by & filed under Accounting Theory.

Description:  While the Patriots and the Rams draw the focus for the Super Bowl in Atlanta, take a moment to consider another big contest that has been playing out all week: Coke versus Pepsi. Pepsi is an official Super Bowl sponsor, so it should normally get all the attention inside the zone surrounding the Super Bowl venue. That’s what it pays the NFL all that money for. But because Coke is headquartered in Atlanta, the company already had a museum facility with plenty of Coke profile inside the NFL’s “exclusive” Pepsi territory. Pepsi seems to be taking it all in stride, posting a billboard with the message “Pepsi in Atlanta. How refreshing.”

Date:  January 30 , 2019

Source:  chicagotribune.com

Link: https://www.chicagotribune.com/business/ct-biz-super-bowl-coke-vs-pepsi-20190130-story.html

Discussion points: 1) Coke and Pepsi are powerful brands. Which do you prefer? How about your classmates?

2) What could you do to attempt to calculate the value of a brand like Pepsi or Coke?

3) Wiley’s Financial Accounting: Tools for Business Decision-Making talks about trademarks like Coke and Pepsi on pages 485-6. What condition must be present for a company to put a value on this intangible asset called a trademark?

Posted by & filed under Ethics.

Description:  In what might be called an ethics survey of Canadian tax preparers, the Canada Revenue Agency has some surprising results. While about 60% do feel failing to report cash income is a serious issue, about half of those preparers don’t see much wrong about a charity giving an inflated tax receipt. Professor Ian Lee from Carleton University in Ottawa questions the findings though, pointing to the relatively small sample size. Further, he believes the professional ethics process of Ontario’s CPAs would prevent most of its members from cheating in preparing returns.

Date:  January 29 , 2019

Source:  ottawacitizen.com

Link: https://ottawacitizen.com/news/local-news/cra-survey-highlights-ambivalent-feelings-about-tax-cheats

Discussion points:

1)  What did you find to be the most interesting result from this survey?

2) Try doing your own in-class survey of students’ attitudes using the five bullet points that tell us the survey results. For example, question one, using the first bullet could be “How do you feel about someone receiving cash for work performed and not declaring the income?”

3) The Ottawa Citizen article tells us “only 44 per cent of those polled agreed with the statement that ‘taxes help the government do worthwhile things.’” How might this belief influence a tax practitioner’s view on fraud? (Hint: Check out the fraud triangle in Wiley’s Auditing: A Practical Approach, for a possible clue.)

Posted by & filed under Succession Planning.

Description:   Ron Joyce, the first franchisee of Tim Horton’s, and the man who helped grow the chain into a fast-food empire, has died. Joyce, a native of Tatamagouche, N.S., eventually sold Tim Horton’s to Wendy’s in the 1990s. He became well-known as a generous benefactor of various institutions. In a highly notable case, in memory of his friend Tim Horton, he began a number of summer camps to benefit children who would not normally be afforded such an opportunity.

Date:  February 01 , 2019

Source:  ctv.ca

Link: https://www.cbc.ca/news/canada/nova-scotia/tim-hortons-ron-joyce-died-1.5001820

Discussion points: 1) Is there a Tim Horton’s on or near your university campus? Keep your eyes open for coffee cups around campus today and do your own informal poll to find the coffee champion on campus.

2) When you think about Ron Joyce’s story, we can see how he did his succession planning by selling his company to another large fast-food chain. As entrepreneurs look ahead to the future, what are some other strategies they can use in succession planning?

3) What exactly is the intangible asset we call a franchise? See page 486 in Wiley’s Financial Accounting: Tools for Business Decision-Making for a definition. 

Posted by & filed under Financial Accounting.

Description:  The Province of New Brunswick is not rich. That’s perhaps one reason why the Auditor General focused some of her attention in her recent report on the fact that the federal government owes the province a pretty big pile of cash. All together, the federal government is on the hook for over $60 million dollars of relief funding for a series of seven natural disasters dating as far back as 2010. While some money has come in from the federal government, this account receivable seems to require some very careful management.

Date:  January 23 , 2019

Source:  telegraphjournal.com

Link: https://www.telegraphjournal.com/telegraph-journal/story/100828958?source=daily-digest&sp-tk=C10BAE279C4B9C489F6A6A00B443C6476CB01E948C422B88BAAFCC83005613C3C4D73D19BBF936C37077E0591AA22C1C0D38D7E3AF1D48B163EA3668CE9B9847101E615A192901BE1749C323DF1FE718EF9557173A3EE1D3E98A523C9E43C45AA2FDF4E0A9ADFCDA338F94F7730E376E347F3186DD7FF40C28F1664E3F2884D9087F11F83A3A07E1FD10E5E888EBFDDDCD5F9E14B5096C92392CB05F9B69B450CD4DFC96

Discussion points:

1) Have you ever lived in a community that suffered a natural disaster and had to receive government help to recover?

2) Why do think it takes the federal government so long to pay the amounts owing on the province’s request for disaster relief funding?

3) Where can you find a discussion of bad debt expense and the allowance for doubtful accounts in Wiley’s Financial Accounting: Tools for Business Decision-Making ?

Posted by & filed under Accounting Careers, Student life.

Description:  It’s a pretty thin line separating about half of Canadians from financial pain. CTV Winnipeg reported that close to half of Canadians are within $200 of insolvency when the end of the month rolls around. About 40% of Canadians foresee that they will be going deeper into debt this year to cover off their cost of living.

Date:  January 21 , 2019

Source:  ctv.ca

Link: https://winnipeg.ctvnews.ca/half-of-canadians-200-away-from-financial-trouble-survey-1.4263191

Discussion points:

1)  When a student has $200 left at the end of the month, that’s probably lots of cash. What do you think of the $200 figure as a barrier for a family ?

2) When you look ahead to an accounting career, do you see yourself working in the area of personal financial planning?

3) Last week this column looked at the principles of managing cash as per pages 381-2 in Wiley’s Financial Accounting: Tools for Business Decision-Making. One of those principles is to prepare a cash budget. How can preparing a cash budget help you avoid going into more debt to cover off living expenses?

Posted by & filed under Fraud.

Description:  It certainly was an eye opener! As reported in the Ryerson University student newspaper called the Eyeopener, the student union appears to have $250,000 in credit card charges that need some explaining. That’s a lot of money for student leaders to be charging. A number of students began asking questions, with one commenting that a failure by the students’ union to issue quarterly financial statements caused concern. Meanwhile, the president of the student union said the accounts will be reconciled by a February 1 deadline.

Date:  January 25 , 2019

Source:  cbc.ca via msn.com

Link: https://www.msn.com/en-ca/news/canada/ryerson-students-union-under-pressure-to-explain-baffling-dollar250k-credit-card-bill/ar-BBSKkmL?ocid=spartanntp

Discussion points: 

1) Do you attend Ryerson, or know anyone who attends there? What is the latest discussion around campus on this matter?

2) What type of governance weaknesses might be exposed by this story?

3) In Wiley’s Auditing: A Practical Approach you can read about the fraud triangle. Do you see how any of the three sides of the triangle may have been at work in this case?

Posted by & filed under Financial Accounting.

Description:  The National Post headline called it a “bad day for McBully.” But you might also say, it was a good day for the little big guy, Ireland’s Supermac burger chain. Owner Pat McDonagh claims his restaurant’s Supermac burger name is lifted from a nickname he carried when he played Gaelic football years ago. The European trade authorities appear to have agreed with Pat against Ronald McDonald and Big Mac in this trademark tiff.

Date:  January 15 , 2019

Source:  cbc.ca

Link: https://nationalpost.com/news/world/bad-day-for-mcbully-mcdonalds-loses-trademark-battle-in-eu-to-irelands-pat-mcdonagh?utm_source=distrosca

Discussion points:

1)  Who do you agree with in this trademark battle?

2) Why do companies work so hard to protect a trademark?

3) Where can you find trademarks discussed in Wiley’s Financial Accounting: Tools for Business Decision-Making ?