Description: Skip the tickets; at least that seems to be the practice of many Canadians and our companies when it comes to paying their fines. So says an investigation by CBC News, one that shows the provinces and the territories are owed $1.3 billion in fines and penalties. The amounts owing include $5 million in fines for a Toronto propane explosion that killed two people 12 years ago, to a Regina resident with $68,000 in parking tickets, and on to someone from Newfoundland and Labrador owing over $72,000 for driving offenses dating back to 1994.
Date: March 11, 2021
1) Have you or any of your classmates ever had a fine? Are they all paid off or could any of your class’s fines be part of the $1.3 billion total?
2) Why do you think some provinces may have downloaded collection of certain fines to the municipalities?
3) Chapter 8 of Wiley’s Financial Accounting: Tools for Business Decision-Making, is titled “Reporting and Analyzing Receivables.” If you were an accounting officer in a province or municipality, what are some strategies you might employ to recover a portion of these outstanding receivables?
Description: Two of Canada’s largest craft beer makers reported that sales were up in 2020, despite the fact that Corona virus had shut down sales channels in bars and restaurants. Big Rock Brewery of Calgary had its highest sales in seven years. Waterloo Brewing Ltd. saw strong growth of 20% during the year, a figure helped along by the fact that only a small percentage of its sales is in the bar and restaurant trade.
Date: March 12, 2021
1) Do you have any craft breweries in your university community? How have they fared in this strange Covid-19 time?
2) In the article, the Big Rock representative mentions that when bars closed down, the company had to take back a lot of inventory in kegs. Can you think of any strategy that could have prevented the loss of that inventory?
3) The article mentions a term “EBITDA.” What does this term mean? (For some help, see page 14-36 of Wiley’s Financial Accounting: Tools for Business Decision-Making.)
Description: New Brunswick’s Auditor General, Kim Adair-MacPherson, has been announced as the next auditor general of Nova Scotia. She will be Nova Scotia’s first female auditor general when she takes over her new post on May 3. Ms. Adair-MacPherson fills a vacancy created when former Nova Scotia Auditor General Michael Pickup left to become Auditor General of British Columbia this past July.
Date: March 11, 2021
Source: cbc.ca & nationalpost.com
1) Who is the auditor general in your province? What was their previous post?
2) If you are considering a career as an accountant, have you ever thought about doing your designation inside of a provincial audit office?
3) On page 1-2 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we read about another former auditor general, Senator Elizabeth Marshall. Do a search of the provincial auditors general in Canada to determine how many of the current incumbents are female, and, how many of them had previously been an auditor general in another jurisdiction.
Description: Last week this blog raised the matter of how the Auditor General of New Brunswick has been denied access to a government-created investment firm called Vestcor. This week, well-known accounting scholar, Dr. Steven Salterio, the Stephen J.R. Smith Chair of Accounting and Auditing at Queen’s University in Kingston, Ontario, weighed in on the issue. Dr. Salterio noted “I think the auditor general is correct in that she should have the mandate to deal with this newly privatized corporation from the point of view this is strictly a government entity.” In reflecting on the billions entrusted by the government and its pensioners to Vestcor, Salterio offered “this is a lot of provincial money going into an organization that is not accountable to the auditor general.” But with the current government apparently unwilling to budge on the issue, the Auditor General feels like her next move might be a legal one.
Date: March 1, 2021
1) Do you agree with Dr. Salterio’s position?
2) Why are governments willing to take the advice of experts during this Covid-19 crisis, but unwilling to take it in other matters, such as Dr. Salterio and the Auditor General providing advice on this pension organization?
3) In chapter one of Wiley’s Auditing: A Practical Approach, we are introduced to several types of audits. What type or types of audits would the Auditor General of New Brunswick probably want to perform at Vestcor?
Description: Well, after months of public debate, Air Canada is finally prepared to offer rebates to customers whose travel plans were shelved by the Covid-19 shutdown. This policy change appears to come in the midst of negotiations for some sort of federal bailout for Air Canada in these difficult economic times. Unfortunately, there has not been much discussion lately of Air Canada’s over $800 million in share buybacks since 2015. Wouldn’t some of that cash been handy to for Air Canada to have had in its coffers during this ‘rainy day?’ https://www.theglobeandmail.com/business/commentary/article-an-air-canada-bailout-should-stick-in-the-craw-of-canadian-taxpayers/
Date: March 3, 2021
Source: cbc.ca & the globeandmail.com
1) Are you or any of your classmates waiting for a refund from Air Canada because of cancelled travel?
2) Are you in favour of a bailout for Air Canada, given the previous buyouts of shares?
3) Starting on page 11-9 of Wiley’s Financial Accounting: Tools for Business Decision-Making, is a section on share buybacks or repurchases. What is the journal entry for a repurchase if the shares are bought back at greater than their average cost?
Description: British Columbia is moving to tax sugary soft-drinks starting on April 1. The provincial sales tax will also apply to the drinks carrying other natural or artificial sweeteners. Vaping supplies will also come under this tax initiative, and, streaming services like Netflix will be required to collect provincial sales tax if they do more than $10,000 of annual sales in BC.
Date: March 6, 2021
1) Are you a pop drinker? Would an increase in tax like the one in British Columbia impact your purchases?
2) Do you support the government placing a tax on out-of-province services like Netflix? Why or why not?
3) On page 10-4 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we see how a vendor can account for the collection of sales tax. What journal entry would you make to record the remittance of sales tax by the vendor to the province?
Description: Now that was a costly injection: the head of the organization investing your Canada Pension Plan resigned last week after news broke that he had received a Covid-19 vaccine in Dubai. Mark Machin has said this trip to the Middle East was for personal reasons, but the timing of his trip comes with repercussions. The federal government has been urging Canadians to refrain from overseas travel, so perhaps this factored into his discussions with the Canada Pension Plan Investment Board (CPPIB) that preceded his resignation.
Date: February 26, 2021
1) Do you know anyone who has traveled outside Canada in this time where the federal government is urging Canadians not to?
2) Do you know anyone who has received a Covid vaccination? Have there been any vaccination clinics on your campus?
3) In Wiley’s Auditing: A Practical Approach, in Chapter Two we read of a four-part ethical framework to guide decisions. Imagine for a moment that you are an executive facing the choice of travel outside of Canada during this Covid time. Apply this framework to this hypothetical situation and make your decision accordingly.
Description: Nothing to see here, at least for the Office of the Auditor General of New Brunswick when it tries to find out about taxpayer money inside a government-created entity called Vestcor. Vestcor was legislated into existence by the Province in 2016, changing the organization managing pensions for civil servants into a private organization. It is no longer considered a Crown-corporation accountable to legislators, and, ultimately, the citizens of NB. The Auditor General wants to look into the organization for a variety of reasons, one of which is to see why it is paying some extremely generous salaries and bonuses to Vestcor management. The CBC reported that the President of the organization reportedly made close to $1.4 million in 2018.
Date: February 24, 2021
1) What do you think of this controversy? Do you think the Auditor General should be granted access?
2) In what circumstances would it make sense for a government to establish a private corporation that would not be subject to an auditor general’s review?
3) On page 2-9 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we are introduced to the notion of pension and benefit obligations. Check out the public accounts (the financial statements) of your home province to determine how it accounts for its pension and benefit obligations to its employees.
Description: For the last year or so, grocery stores have done quite well. Shuttered restaurants boosted sales at grocers as consumers were unable to eat out as they had been doing pre-Covid. Loblaws has reported its sales are up 10% over the previous year, but expectations are that 2021 will not see the same levels of sales. Online sales are way up, but Loblaws points out that there are additional cost factors associated with online sales.
Date: February 25, 2021
1) How have your dining habits changed over the past year? Are you spending more at grocery stores and less at restaurants?
2) Imagine yourself in a senior accounting role at a grocer such as Loblaws. What are some strategies you might propose to help prepare the company to deal with the expected decline in sales in 2021?
3) Chapter 5 of Wiley’s Financial Accounting: Tools for Business Decision-Making, begins with a short vignette about Loblaws. What is the chief difference between the “stock and ship” model and the “flow model” of supply-chain management?
Description: In an extraordinary week of cold weather, Texas has been dealing with a crisis. Power failures left many Texans in the cold, then freezing water pipes and crippled water treatment plants created a shortage of clean drinking water. This crisis may prompt governments and utilities in North America to consider just how resilient our infrastructure is in dealing with extreme weather events.
Date: February 19, 2021
1) Have you ever lost your power for an extended period due to extreme weather? How did you deal with it?
2) If you were an executive at an electric utility, what lessons do you think you might learn from the troubles in Texas this past week?
3) Chapter 9 of Wiley’s Financial Accounting: Tools for Business Decision-Making deals with reporting of long-lived assets. Do some research with your classmates to determine what range of useful lives electric utilities are using in depreciating their electrical grids.