Posted by & filed under Auditing.

Description:  Do you like chocolate? Well a lot of the world sure does. There’s a bit of a crisis in the cocoa world these days though, according to Bloomberg. One of the big suppliers, Saf-Cacao of Ivory Coast, has become part of a total of 32 exporters who have defaulted on their supply agreements. KPMG has carried out an audit of the industry revealing the extent of the default on contracts.

Date:  November 23, 2018

Source:  bloomberg.com

Link: https://www.bloomberg.com/news/articles/2018-11-23/cocoa-crisis-hits-top-grower-s-exporters-as-banks-pull-finance

 

Discussion points:

1) Are you a chocolate lover? Were you aware of the cocoa crisis?

2) How might this supply problem influence future market pricing?

3) In chapter one of Wiley’s Auditing: A Practical Approach, you can read about various types of audit engagements that an auditor might perform. What type of audit do you think KPMG performed on the cacao industry?

Posted by & filed under Canadian governments, Managerial Accounting, Sustainable Development.

Description:   Deep Earth Energy Production Corp. (DEEP) is going deep. The company is the driving force behind a 3.5 km deep well to be drilled in Estevan Saskatchewan. The well will generate geothermal energy from underground steam, providing a source of green power to the Western province. Funnily enough, DEEP’s deep well source was discovered by the old carbon producing oil industry.

Date:  November 22, 2018

Source:  cbc.ca

Link: https://www.cbc.ca/news/canada/saskatchewan/drilling-geothermal-plant-sask-1.4917287

 

Discussion points:

1)  Are there any renewable energy projects near your university campus? What variety?

2) Why do you think the federal and provincial governments contributed to the costs of the project?

3) See page 25 of Wiley’s Managerial Accounting: Tools for Business Decision-Making. Note the distinctions between Fixed and Variable Costs. How do these terms apply in the story about the costs of DEEP’s power production?

Posted by & filed under Advanced Accounting, Marketing & Strategy.

Description:  With winter-like weather hitting several parts of Canada last week, you may have seen many citizens enjoying the warmth of a “Canada Goose” jacket. With rising revenues, the company is seeing its shares up about twenty percent. Meanwhile, Canada Goose has invested in the acquisition of Baffin, a footwear manufacturer. It looks like Canada Goose is expanding beyond its warm clothing and into the winter boot market.

Date:  November 14, 2018

Source:  financialpost.com

Link: https://business.financialpost.com/news/retail-marketing/canada-goose-reports-second-quarter-profit-up-raises-outlook-for-full-year

 

Discussion points:

1)  Have you ever worn a Canada Goose jacket? What makes them so popular?

2) What do you think of the company’s expansion into footwear? Is it a good strategic move?

3) Using the guidelines of Illustration 12-3, page 654 of Wiley’s Financial Accounting: Tools for Business Decision-Making, what method is Canada Goose likely to use for its acquisition of Baffin?

Posted by & filed under Canadian Economy, Student life.

Description:  Canadians are carrying a lot of debt. Canadians debt ratios now sit at 169% of disposable income of households. In 2006 the ratio was at 132%. Canada’s central bank is concerned that the consumer debt issue could put the economy in trouble as the low interest rates of the past few years creep higher.

Date:  November 14, 2018

Source:  nationalpost.com

Link: https://nationalpost.com/news/economy/canadas-economic-achilles-heel-a-mountain-of-household-debt/wcm/dde04df3-8e48-4d97-be13-8a8fdae97bdd

 

Discussion points:

1)  Are you or or your classmates carrying any student debt? How will it impact starting out after university?

2) Do you think consumers have been taking on too much debt during this time of low interest rates and high employment?

3) Check out the Accounting Matters feature on page 535 of Wiley’s Financial Accounting: Tools for Business Decision-Making. What percentage of consumers would default on a mortgage if laid off for more than three months?

Posted by & filed under Canadian Economy, Taxation.

Description:  According to the theory, the massive US tax cuts of last year were supposed to get the tech companies hiring lots of workers. But according to the Financial Times of London, five large American tech firms, including Apple and Alphabet, spent $115 billion on share buybacks. This could be setting up the companies for long-term problems as instead of investing for the future, they may be focused on short-term gains for investors and executives. Meanwhile, the taxpayers may have to dig deeper or suffer program cuts as the treasury suffers from revenue depletion to pay for the tax cuts.

Date:  November 14, 2018

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/share-buyback-tech-stocks-1.4902823

 

Discussion points:

1) What is your feeling towards the tech giants and other companies that seem to have been spending their tax savings on dividends and buying back shares?

2) Do you think tax cuts are a good way to stimulate the economy?

3) In Chapter 13 of Wiley’s Financial Accounting: Tools for Business Decision-Making, problem BE 13-11, page 739, poses the following question regarding Apple: “Why do you think the amount of dividends paid is greater than the amount of capital expenditures in 2014?” Given the information presented in this article and Chapter 13, what do you think the answer might be?

Posted by & filed under Accounting Careers, Managerial Accounting.

Description:  How did this happen? So, you’ve probably heard that marijuana has been legalized and there are now a variety of ways to buy it, depending on where you live. But in New Brunswick, where the government has chosen a Crown corporation model, at least 12 of the roughly twenty Cannabis NB stores were shut down some time in the last week because they were without inventory. Customers showing up at the closed doors were probably not pleased.

Date:  November 6, 2018

Source:  cbc.ca

Link: https://www.cbc.ca/news/canada/new-brunswick/cannabis-producers-shortages-stores-closed-1.4894314

 

Discussion points:

1)  Had you or your classmates heard about this store closure issue? What was your response?

2) On page 6 of  Wiley’s Managerial Accounting: Tools for Business Decision-Making, you can read about the impact of stock outs. How do you think these stock outs at Cannabis NB may impact on the company?

3) What journal entries would you prepare to show the sale of a product and the corresponding cost of goods sold when you sell inventory? See Chapter Five of Wiley’s Financial Accounting: Tools for Business Decision-Making. 

Posted by & filed under Accounting Careers, Student life.

Description:  According to a recent survey by Robert Half, over three-quarters of Canadians are tired at work on a fairly regular basis. If you are tired, it is more difficult to put in a strong effort at work. More mistakes can happen. Profits could suffer. Productivity catalyst Clare Kumar argues that both management and the employees share responsibility in making sure workers get that 7 to 8 hours of sleep most people require.

Date:  November 8, 2018

Source:  cbc.ca

Link: https://www.cbc.ca/news/canada/more-workers-are-tired-on-the-job-and-its-bad-for-business-1.4897585

 

Discussion points:

1) Could you relate to this story? Is getting enough rest an issue for your life?

2) What approach might you take to try to determine the cost of tired workers to a company?

3) In Chapter Seven of Wiley’s Financial Accounting: Tools for Business Decision-Making, we can see a discussion of the limitations of internal control. What limitations does worker fatigue best fit under?

Posted by & filed under Canadian Government, Data security, Personal Tax.

Description: Last week this space featured a discussion of a request by Statistics Canada to obtain banking information of Canadians without having approached those Canadians first. Of course, the opposition parties in Parliament were quick to criticize this apparent breach of protocol, though Statistics Canada had made efforts to brief the press beforehand. This week National Post columnist Andrew Coyne offered another view of the story, noting how political parties in Canada have plenty of personal information about us in their files. To make matters worse, the federal political parties have written the laws on privacy such that they do not apply to them.

Date:  November 5, 2018

Source:  nationalpost.com

Link: https://nationalpost.com/opinion/andrew-coyne-political-parties-not-statistics-canada-are-the-real-bad-guys-of-privacy-invasion

 

Discussion points:

1) Were you aware of the volume of information the political parties can gather and their exemption from privacy legislation?

2) Have you ever worked on a political campaign? What sort of information did you have available to help the campaign?

3) How are donations to political parties treated in filing personal income tax returns?

Posted by & filed under Accounting Principles.

Description:  With fuel costs per litre up close to 40% over last year, WestJet’s latest earning report is not pleasant reading for shareholders. Profits are down this quarter. In addition to the fuel cost pressures, the threatened pilots’ strike in May probably impacted passenger bookings. And, like others in the industry, WestJet feels the intense pressure of low-cost providers.

Date:  October 30, 2018

Source:  cbc.ca

Link: https://www.cbc.ca/news/canada/calgary/westjet-profit-third-quarter-fuel-prices-down-1.4883627

 

Discussion points:

1) Have you ever flown WestJet? How would you rate this airline compared to others?

2) From reading this article, what would you say are some of the key challenges faced by airlines in setting ticket prices?

3) Take a look at the opening vignette in Chapter Nine of Wiley’s Financial Accounting: Tools for Business Decision-Making. What does WestJet use as the useful life of its airplanes in calculating depreciation?

Posted by & filed under Accounting Careers.

Description:  It’s been a source of dispute between Newfoundland and Quebec for many years. But the Supreme Court ruled this week that there is no need to reopen the 65 year agreement covering the Churchill Falls hydro development. The problem is that Hydro Quebec has earned about 27.5 billion  dollars from the project because the price it pays Newfoundland actually decreases over time. Newfoundland has earned about $2 billion over the same time period.

Date:  November 2, 2018

Source:  thetelegram.com

Link: https://www.thetelegram.com/news/supreme-court-sides-with-hydro-quebec-in-historic-churchill-falls-dispute-255936/

 

Discussion points:

1) Had you ever heard of this Churchill Falls problem? After reading the linked article, where do you stand on this dispute?

2) What lessons can an accounting student learn from this dispute?

3) What are some of the significant challenges associated with planning massive capital projects like this?