Description: Internal control is important in preventing and detecting fraud and theft. The Royal Canadian Mint found out recently that metal detectors were not sufficient to prevent or detect an employee from stealing over $150,000 in gold by hiding it in a body cavity. Lawyer Gary Barnes noted that controls over the precious metals were surprisingly weak, indicating that “they had pails of gold just sitting around and people could walk by and actually just pick things out of them.”
Date: February 2, 2017;
1) Were you surprised by the ease with which this employee was able to smuggle out the gold?
2) Wiley’s Auditing: A Practical Approach discusses the so-called Fraud Triangle. After reading this story, can you see how one or more elements of the fraud triangle may have been in play?
3) What controls might you recommend to help improve security at the Mint? Hint: Check out Chapter Seven of Wiley’s Financial Accounting: Tools for Business Decision Making.
Description: We often hear of corporate mergers in reading the financial press. But it’s not every day that we hear of the merger of two large charitable organizations. That did happen this past week, however, when the Canadian Cancer Society and the Canadian Breast Cancer Foundation joined forces. With declining revenues, the merger will help the new combined entity direct funds to research by reducing administrative costs.
Date: February 1, 2017; updated February 2, 2017
1) What do you think about this merger strategy?
2) Many students may have studied consolidations of profit oriented enterprises. But what would be some differences to consider in preparing the consolidated financial statements of not-for-profit organizations?
3) Do you think the merger of these two major charities may signal the start of a trend?
Description: On Wednesday, January 25, 2017, the Dow Jones Index busted through the 20,000 barrier for the first time ever. In March of 2009, the financial crisis drove the index to 6,440. But growth has been consistent for several years and the election of Donald Trump seems to have boosted investor confidence.
Date: January 25, 2017;
1) What is the significance of busting through the 20,000 barrier?
2) Which chapter of Wiley’s Financial Accounting: Tools for Business Decision Making teaches accounting students about shares and shareholders?
3) Do you think the stock market will continue this upward trend?
Description: Many consumers carry that little blue Air Miles card in their wallets, racking up points at retail stop, gas stations and service providers. But Air Miles has reduced the redemption value of the points bank for some vacations, causing angst with Air Miles collectors. Allison Peters decided to book a trip to Mexico, only to find out that she had lost about $2,000 worth of travel value on her account. Needless to say, Allison and other collectors are not pleased by the news.
Date: January 27, 2017; updated January 28, 2017
1) Are you an Air Miles collector? If so, did you know about this change? How does it affect you?
2) What would you recommend Air Miles do to handle the public relations impact of this strategy?
3) How will this change in Air Miles strategy be reflected in its financial statements?
Description: This past Tuesday night a major ice storm knocked over 100,000 NB Power customers off the grid, and by weekend thousands of New Brunswickers were still without electricity. With colder winter weather settling in, after a few days near the zero mark, citizens are facing both darkness and cold. A number of communities have declared a state of emergency. The federal government has offered the aid of the military if it is required.
Date: January 28, 2017
1) What is the longest you have ever been without power? What challenges did you face?
2) How would a government account for the costs associated with an emergency like this?
3) What might be some additional risk issues an auditor would have to identify in auditing the expenditures for an emergency situation like this?
Description: Canadian companies are falling behind. Only 6 Canadian companies made the list of the world’s top 100 most sustainable companies. In 2016, 9 companies were there and in the previous year 12 Canadian companies hit the top. Part of the reason for the decline appears to be stronger disclosure requirements for companies in other jurisdictions.
Date: January 17, 2017
1) What do you think are the causes behind this decline in the sustainability ranking of Canadian firms?
2) Do you think that Canadian regulators should increase the sustainability reporting requirements for Canadian companies?
3) Chapter One of Wiley’s Auditing: A Practical Approach refers to audits which deal with this issue of sustainability. What are these audits called?
Description: She saw the company through a rough spot. And now Loblaws has rewarded Sarah Davis and named her as president of the huge grocer. Davis has been described as strong with both operations and the numbers side of the business. One of her challenges may be continuing to integrate the Shoppers Drug Mart acquisition, including a marriage of Shoppers’ and Loblaws’ customer loyalty programs.
Date: January 19, 2017
1) Ms. Davis is described as having strengths in both operations and in the numbers. What type of training do you think may help build those strengths?
2) The article discusses customer loyalty programs. How would a company account for the rewards customers have built up but not yet claimed?
3) Wiley’s Financial Accounting: Tools for Business Decision Making talks about both Loblaws and Shoppers Drug Mart. Where can you find information on these companies in your accounting text?
Description: Donald Trump has put pressure on US automakers to keep manufacturing jobs in America. But what about Apple? The wealthy computer maker doesn’t actually make its devices in the United States. Globe and Mail columnist Eric Reguly points out that many of Apple’s products owe a debt to government funded technological advances, so perhaps it should face some pressure to build things at home.
Date: January 20, 2017
1) What do you think of the arguments posed by Eric Reguly?
2) If you were a financial advisor to government, what steps would you take to encourage manufacturers who have benefited from government-funded technology advances to create jobs in their home country?
3) The article talks about Apple’s responsibility to shareholders. In what chapter of Wiley’s Financial Accounting: Tools for Business Decision Making can you find discussion of a shareholder’s rights?
Description: On a cold winter’s morning if you are getting set to walk to your early class, you may be one of the many Canadians enjoying the comfort of a warm Canada Goose garment. Of course, at $900 a pop, it often takes the intervention of a generous parent to bring one of these coats into a students’ life. Now, Canada Goose is valued at around $2 billion and is looking at trading up to 15% of the company in an initial public offering (IPO).
Date: January 13, 2017;
1) What are some of the requirements a company has to deal with in an IPO?
2) How do you get to your classes in the morning? Do you have to walk outside in the cold? Do you or any of your friends wear Canada Goose clothing?
3) Wiley’s Financial Accounting: Tools for Business Decision Making refers to two major frameworks for accounting: IFRS and ASPE. If Canada Goose goes public, which framework will it be required to use?
Description: The Canada Revenue Agency (CRA) is on the trail in British Columbia, trying to pursue millions in unpaid taxes. A court document indicates that an initial audit shows up to $17 million in unreported income may have been hidden by a Canadian company using offshore firms in the Caribbean and Hong Kong. This may be an example of the Canadian government’s announced intent to spend an additional $444 million on finding tax evasion and tax avoidance.
Date: January 13, 2017
1) What interested you most about this story?
2) What strategies might the government use to encourage tax compliance?
3) As someone training to be an accountant, have you ever thought about a career with the CRA?