Posted by & filed under Auditing, Ethics, Fraud.

Description: Last week this blog discussed how the assessment service in  Province of New Brunswick invented renovations for over 2,000 residential properties in the province, causing big increases in tax assessments. The Premier has responded to the growing crisis by appointing a retired appeal court justice to examine the system. Anonymous insiders have claimed that invented assessments are the result of government direction to fast track a new assessment system.

Date: April 3, 2017

Source: cbc.ca

Link: http://www.cbc.ca/news/canada/new-brunswick/tax-scandal-service-new-brunswick-1.4052233

Discussion Points:

1) Do you think that using the Auditor General’s Office (rather than a retired judge) to investigate these problems would offer a different perspective?

2)  Notice that rushing the system changes through is listed as a possible cause of this crisis. During your university courses, have you studied any famous cases where rushing system changes resulted in disaster?

3)  Do you think that the actions in this case could possibly be called a fraud?

Posted by & filed under Accounting Theory, Canadian governments.

Description: In an intriguing display of public outrage, approximately 200 protestors gathered outside Bombardier headquarters in Montreal to decry the bonuses granted to company executives while taxpayers have been bailing out the company. With both the federal and provincial governments kicking in over a billion dollars, citizens were outraged that the company opened up the cash box for its management. In response, Bombardier announced they would defer the bonuses until 2020.

Date: April 2, 2017

Source: cbc.ca

Link: http://www.cbc.ca/news/canada/montreal/bombardier-protest-unions-salaries-pay-1.4051876

Discussion Points:

1) Were you familiar with the government assistance to Bombardier? Do you agree with this as a wise use of taxpayers’ money?

2)  If you were a senior executive at Bombardier, how would you have responded to this protest?

3)  What does accounting theory teach us about structuring compensation for executives?

Posted by & filed under Canadian governments, Ethics.

Description: And in a second accounting update from the small Province of New Brunswick, a recent investigation by the CBC has revealed that government officials invented renovations for over 2,000 residential properties in the province, creating big increases in tax assessments for the homeowners. An email revealed that government invented the renos when assessment officials did not have the resources to confirm whether or not they had taken place. The Premier is stating he knew nothing of the invented renovations.

Date: March 31, 2017

Source: cbc.ca

Link: http://www.cbc.ca/news/canada/new-brunswick/tax-scandal-nb-gallant-higgs-renovations-invented-property-1.4049441

Discussion Points:

1) Where can you read about accounting for land and real estate in Wiley’s Kimmel, Financial Accounting: Tools for Business Decision-Making, Sixth Canadian Edition?

2)  What do you think may have prompted those in the civil service to have taken the rather unusual (and unethical) step of inventing renovations?

3)  Do you believe the government ministers in charge of the matter should resign?

Posted by & filed under Auditing, Canadian Government, Cost Accounting.

Description: Critics and citizens alike have long decried the lofty election promises politicians make during election campaigns. But now the Liberal government of the tiny Canadian province of New Brunswick appears to be trying to change this dynamic by proposing a law requiring political parties to cost their election platforms. Violators would be punished by being forced to suspend their campaign advertising. Of course one thing users might note is that there is no audit provision in the proposed legislation.

Date: March 29, 2017

Source: cbc.ca

Link: http://www.cbc.ca/news/canada/new-brunswick/campaign-costing-bill-revived-1.4046087

Discussion Points:

1) What do you think of the idea of forcing politicians to cost election promises? Will it work?

2)  What might be some of the techniques an accountant could use to cost election promises?

3)  What are some of the issues that might emerge if the information is not audited?

Posted by & filed under Canadian Economy, Canadian governments, Uncategorized.

Description: While Saskatchewan, Alberta and the federal government in Ottawa have all delivered budgets with big planned deficits in recent weeks, last week the Province of Quebec issued a balanced budget. The budget also promised an income tax cut for Quebec citizens. Could this have anything to do with a coming election in 2018?

Date: March 28, 2017

Source: globeandmail.com

Link: http://www.theglobeandmail.com/news/national/quebecs-balanced-budget-boosts-spending-cuts-taxes/article34461363/

Discussion Points:

1) Were you surprised to see that the Quebec government issued a balanced budget in this year of deficits?

2)  What factors do you think contributed to the province’s fiscal good news?

3)  If you were the Minister of Finance, would you have cut taxes now, knowing that Quebec still has a huge debt load?

Posted by & filed under Canadian Government, Student life.

Description: This week’s federal budget had a number of interesting measures, and one that seems to be very strategic is the announcement of close to $118 million in funding for 25 research chairs in an effort to recruit “top-tier international scholars.” Following the U.S. election and the earlier Brexit vote in Britain, the promise of more dollars for science research in Canada may be just one more factor that helps scientists in those countries decide on Canada as an attractive place to live and work. One aspect of the funding is that it is intended to allow universities to respond quickly to serious inquiries from overseas scientists.

Date: March 23, 2017

Source: globeandmail.com

Link: http://www.theglobeandmail.com/news/national/federal-budget-positions-canada-to-lure-scientists-from-us-and-britain/article34412882/

Discussion Points:

1) Did you follow the news around the federal budget or discuss it in any of your university classes?

2)  Do you see the funding on these research chairs as a good strategic move?

3)  As a student, were there any measures in the federal budget that impacted you?

Posted by & filed under Contemporary Business Issues.

Description: Critics may say that share buybacks take away from resources for future growth. But in his latest letter to shareholders of Berkshire Hatheway, Warren Buffet argues that buybacks can be a good move, as long as the price is right. One purpose of the buyback can be for management to signal concerns that the share price is undervalued.

Date: March 20, 2017; updated March 21, 2017

Source: globeandmail.com

Link: http://www.theglobeandmail.com/globe-investor/investment-ideas/warren-buffett-urges-buybacks-for-the-right-price/article34357126/

Discussion Points:

1) Where can you read about share buybacks in Wiley’s Kimmel, Financial Accounting: Tools for Business Decision-Making, Sixth Canadian Edition?

2)  After reading through the article, what is your feeling on use of share buybacks?

3)  Buffet says “both American corporations and private investors are today awash in funds looking to be sensibly deployed.” This seems to be an enviable situation for a business. But what are the dangers of too much cash?

Posted by & filed under Auditing, Corporate Strategy.

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

Source: globeandmail.com

Link: http://www.theglobeandmail.com/news/national/newfoundland-craft-brewery-partnership-falls-flat-over-legal-desputes/article34424589/

Discussion Points:

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?

Posted by & filed under Accounting Theory.

Description:

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

Source: globeandmail.com

Link: http://www.theglobeandmail.com/report-on-business/international-business/glaxosmithkline-to-pay-first-female-ceo-emma-walmsley-less-than-predecessor/article34299909/

Discussion Points:

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?

Posted by & filed under Franchise, Managerial Accounting.

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

Source: cbc.ca

Link: http://www.cbc.ca/beta/news/business/tim-hortons-franchisees-1.4024021

Discussion Points:

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?