Raise Our Taxes Please

Posted by & filed under Personal Tax.

Description: Billionaires and mere millionaires head for Davos this time of year for the World Economic Forum. This year though, some of those members of the wealthy elites are making the rather unusual request that their taxes be raised. An American group called Patriotic Millionaires is seeking a form of global changes to help shrink the gap between the super-rich and the rest of us. So far it appears that their fellow guests have not been rushing to join the movement.

Date:  January 23, 2020

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/bank-canada-poloz-1.5436058

 

Discussion points:

1) Were you surprised by this story?

2) What do you think should be the highest marginal tax rate on high earners?

3) Wiley’s Advanced Accounting discusses the principles of preparing government financial statements. Where would personal income tax revenues show up in government financial statements?

Time to Pay, Volkswagen

Posted by & filed under Uncategorized.

Description: Dieselgate, the emissions scandal associated with Volkwagen since 2015, hit Canadian news again this past week. A judge imposed $196.5 million in fines on the German car maker, punishing Volkswagen for importing cars that didn’t comply with Canadian emission regulations. This huge fine is the largest environmental fine ever imposed in Canada.

Date:  January 22, 2020

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/volkswagen-pleads-guilty-emissions-cheating-canada-1.5436346

 

Discussion points:

1) Have you heard of Dieselgate? What do you think of this large fine?

2) Do you know anyone who owned a Volkswagen vehicle with these emission problems? How were they impacted?

3) In Wiley’s Auditing: A Practical Approach, we see how important it is for auditors to understand the organizations they are auditing in order to assess risk. If you were on the audit team of Volkswagen, how might the whole Dieselgate problem impact your assessment of risk?

Is This Time to Tame the Deficit ?

Posted by & filed under Accounting Principles.

Description: Running federal deficits in good times may hurt Canadians in the long run according to HEC Montreal’s Centre for Productivity and Prosperity. Our Canadian government ran deficits from 2015 through 2018, and this may have lead to economic growth. Now, with no recession in sight, the latest financial update from the government indicated that the current deficit would be in the range of $27 billion, $7 billion higher than that projected in the budget. As the authors of the study say regarding current economic conditions, “If these aren’t the conditions for achieving a balanced budget, what will it take?”

Date:  January 15, 2020

Source:  thestar.com

Link: xhttps://www.thestar.com/business/2020/01/15/recurring-federal-deficits-could-be-risky-for-future-generations-study-says.html?source=newsletter&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_19813&utm_content=a06

 

Discussion points:

1) What is your opinion of the government deficit situation?

2) Where would the annual deficit show up on the Government of Canada financial statements?

3) On pages 381-2 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we read about the principles of cash management. When our government is running a deficit, what do you think would be some of the challenges in managing cash flow?

Pressure on Wages

Posted by & filed under Managerial Accounting, Uncategorized.

Description: Statistics Canada tells us that in Toronto and other cities in southern Ontario, wages for men have either been flat – no increases – or on the way down for the 15 year period between 2000 and 2015. In contrast, wages for males elsewhere in Canada went up by 13% over the same period. According to economist Sheila Block “This quantifies what everyone felt was true.” The reduction in manufacturing jobs has been tough not just on the manufacturing workers themselves, but also on their surrounding communities.

Date:  January 15, 2020

Source:  thestar.com

Link: https://www.thestar.com/business/2020/01/15/men-living-in-toronto-havent-seen-their-wages-increase-since-2000-according-to-new-statcan-study.html?source=newsletter&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_19813&utm_content=a02

 

Discussion points:

1) Do you know anyone impacted by this situation with manufacturing jobs?

2) One of the people quoted in the story puts the blame on poor government negotiation on trade deals, noting that Canada has slipped a long way from its old fourth-place standing in auto production. What do you think the government could do to secure better trade terms?

3) In Chapter 2 of Wiley’s Managerial Accounting: Tools for Business Decision-Making, is a thorough discussion of cost behaviour. Which of the various costs discussed in this chapter would be impacted by a freeze or a cut in wages over that 15 year period?

Direction Change at BlackRock

Posted by & filed under Marketing & Strategy, Sustainable Development.

Description: BlackRock, the largest manager of financial assets in the world, is making an about face on climate change. In a letter to CEOs, BlackRock signaled that the economy is “on the edge of a fundamental reshaping of finance” due to the threat of climate change. BlackRock is looking at dispensing with coal-related investments and says it will work with the companies it invests in to ensure better environmental disclosures.

Date:  January 14, 2020

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/blackrock-investment-climate-change-1.5426465

 

Discussion points:

1) Have you ever heard of BlackRock? If so, what do you know about the firm?

2) How do you think BlackRock’s change in strategy will influence behaviours in the marketplace?

3) In Chapter 1 of Wiley’s Auditing: A Practical Approach, you can learn about several different types of auditing. Which types of auditing could be employed to assist in efforts to disclose a company’s risk around climate change?

Layoffs at Loblaws

Posted by & filed under Accounting Principles.

Description: In last week’s blog, you may have read the piece describing research by the Canadian government, noting that AI may not be targeting as many jobs as feared. Don’t tell the workers at the Loblaws grocery chain warehouses: they may not believe you. Automation and consolidation of facilities will put about 800 workers on the sidelines by the end of 2021. Loblaws says it will work with the unions to help ease the painful transition.

Date:  January 7, 2020

Source:  cbc.ca

Link: https://www.cbc.ca/news/canada/montreal/provigo-maxi-loblaws-distribution-centre-laval-1.5417932

 

Discussion points:

1) Have you ever worked for a grocery chain as a part-time or summer job?

2) What types of jobs do you feel are most vulnerable to automation?

3) In Chapter 5 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we learn about the multi-step income statement (see page 257 for example). Where would the cost reductions from automation show up on this financial statement?

$ 3 Million Ransom

Posted by & filed under Data security.

Description: The hackers are keeping busy. Travelex, a company dealing in foreign exchange transactions, has been hit by a virus. Reports say the hackers are holding Travelex to a $3 million ransom under the threat of releasing personal data. In the interim, the company’s outlets at various airports will use manual processes to exchange currency.

Date:  January 10, 2020

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/travelex-hacker-1.5422665

 

Discussion points:

1) Have you, or anyone you know, had to pay a ransom to repair a hack?

2) If you were an executive at Travelex, would you pay the ransom??

3) On page 430 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read about Equifax. This is another organization that was hit with a major hack. How did Equifax respond to this threat?

CRA Gets a “D”

Posted by & filed under Accounting Careers, Personal Tax.

Description: The Canadian Federation of Independent Business (CFIB) doesn’t think the Canada Revenue Agency (CRA) is doing a very good job responding to inquiries from its members. The federation has given the CRA a “D” grade, observing the tax agency takes too long to respond, and, when it does, businesses often get incomplete information. The CRA introduced a new phone system in an apparent effort to reduce the problems, however, the CFIB says that the tax authority did worse on this year’s survey compared to the previous one in 2016.

Date:  January 7, 2020

Source:  financialpost.com

Link: https://business.financialpost.com/personal-finance/taxes/business-group-gives-cra-a-d-grade-in-scathing-report-citing-wait-times-wrong-information

 

Discussion points:

1) Have you ever experienced trouble trying to obtain information from the Canada Revenue Agency?

2) The CRA frequently recruits university students to join them for both summer jobs and full-time work. How does a story like this one impact recruiting efforts?

3) Starting on page 172 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we find a section explaining the differences between the cash basis of accounting and the accrual basis. Which basis do you think CRA wants you to use? Why?

AI: Not as Bad as Feared?

Posted by & filed under Accounting Careers.

Description: The robots may still be coming – coming for your job that is – they just aren’t coming as fast as expected, at least according to research carried out this past year by the federal government. Nonetheless, expectations are that 11% of jobs could be replaced by some form of artificial intelligence (AI) in the next 20 years. Rural areas are one region of concern for federal officials. The information is contained in a report prepared to advise incoming ministers following the recent election. The CBC obtained the details by filing a request under the Access to Information Act.

Date:  January 1, 2020

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/canadian-workforce-ai-documents-1.5412341

 

Discussion points:

1) Are you concerned about the rise of AI and how it may affect your future after graduation?

2) Have you ever given any thought to this whole access to information thing? I mean, from an accountability point of view, our tax dollars paid for these important reports to be produced. But in order for us to see the information we have already paid for, the CBC had to go through the hassle of filing a right to information request before preparing this important story. What do you think of this from an accountability point of view? Should there be an easier way to get to see what we have funded?

3) On pages 8-9 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read about organizations that set accounting standards. If AI takes on a larger role in the accounting world, what might be some of the issues standard setters will have to deal with?

Western’s Benefactor Dies

Posted by & filed under Personal Tax, Student life.

Description: Richard Ivey, a well-known Canadian philanthropist, has died. Students may recognize the Ivey name for the Ivey Business School at Western University. The Ivey Foundation has donated over $100 million to various causes since it was founded by Richard Ivey’s father – also named Richard Ivey – in 1947.

Date:  December 31, 2019

Source:  cbc.ca

Link: https://www.cbc.ca/news/canada/london/richard-macaulay-ivey-dies-at-94-1.5411382

 

Discussion points:

1) Are you a student at the Ivey Business School at Western? If not, do you know anyone attending that well-known school?

2) What are some of the reasons that a family might set up a foundation to distribute gifts to organizations?

3) Wiley’s Financial Accounting: Tools for Business Decision-Making, has a vignette at the start of one of its chapters about Western University. Find this vignette. What important accounting topic does it introduce?