Airbnb wins this round

Posted by & filed under eCommerce.

Description:  In the grand battle of the City of New York versus Airbnb, the online rental agency wins this round. This means that Airbnb and other online rental agencies will not have to provide the City with details of renter addresses and names. The City is concerned that Airbnb and similar agencies can drive up rents and change neighbourhoods. In many cases it is illegal to rent an apartment in New York for less than 30 days.

Date:  January 3, 2019

Source:  bloomberg.com

Link: https://www.bloomberg.com/news/articles/2019-01-03/airbnb-wins-preliminary-ruling-blocking-nyc-demand-for-data

Discussion points:

1)Have you used Airbnb or a similar service? What was your experience?

2) Do you agree with the City of New York’s position that short-term rental services like this will drive up rents and change neighbourhoods?

3) Where would you anticipate seeing a lawsuit discussed in Airbnb’s financial statements? For information on this question, check out chapter ten of Wiley’s Financial Accounting: Tools for Business Decision-Making.

Snow plow woes

Posted by & filed under Accounting Careers.

Description:  So they have large and expensive houses there on Yacht Haven Lane in Saint John, New Brunswick, and so of course they pay their fair share of property taxes. You can imagine then, that the Yacht Haven Lane residents would expect the City to plow their road. But years ago, when the property developer, Sandy Robertson, began the development, his road into the community was classified as too narrow to be designated as a City of Saint John public road. Therefore he and the residents had to assume the costs of snow plowing, despite their contributions to the public purse.

Date:  January 4 , 2019

Source:  cbc.ca

Link: https://www.cbc.ca/news/canada/new-brunswick/yacht-haven-lane-millidgeville-saint-john-olowing-1.4964947

Discussion points:

1)  Whose side do you take on this discussion?

2) If you were the Treasurer of the City of Saint John, what advice would you present to the City to help in the decision regarding snow plowing on Yacht Haven Lane?

3) If you are a company that has just received your property tax bill for the year, what journal entries would you need to record to set up the transactions related to property tax? Hint: You may want to take a look at Chapter 10 of Wiley’s Financial Accounting: Tools for Business Decision-Making.

Unemployment’s down; Why aren’t wages up?

Posted by & filed under Canadian Economy, Student life.

Description:  Unemployment in Canada has hit its lowest rate in forty years. The curious thing though, is that wages are not rising, in contradiction to our understanding of demand and supply. So, we seem to be faced with a case of good news/bad news. Though an increase in jobs is a very good thing, Manulife Asset Management executive Frances Donald said “I would caution us against celebrating too quickly.,”

Date:  December 7, 2018

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/jobs-numbers-unemployment-40-year-low-1.4936445

 

Discussion points:

1)  With employment numbers up, how does it look for you in terms of finding summer employment?”

2) What’s your theory on why wages are not keeping up with job growth?

3) On page 422 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read about the work of collection agencies. How do you think the current low unemployment tsitutation would influence the work of collection agents?

Do you use self-checkout?

Posted by & filed under Canadian Economy, eCommerce.

Description:  Some call them job killers, those automated checkouts that seem to be spreading in the retail world. According to a survey from Dalhousie University, about 25% of those sampled had never used a self-checkout. Automation obviously allows for companies to cut costs. Some argue, though, that technological change leads to job growth.

Date:  December 8, 2018

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/self-checkout-cashier-jobs-retail-automation-1.4937040

 

Discussion points:

1)  Are you a regular user of the self-checkout? Why or why not?

2) How will these advancements in technology impact the Canadian economy?

3) In the article, you can read a comment from citizen Dan Morris of Brockville who said “Machines don’t pay taxes, they don’t pay into the pension plan.” Where do companies account for their pension liabilities in their financial statements? Hint: See page 62 of Wiley’s Financial Accounting: Tools for Business Decision-Making.

Huawei Chief Financial Officer Arrested

Posted by & filed under Contemporary Business Issues.

Description: Some shocking news emerged this week as we found out that Canada had arrested Huawei Chief Financial Officer Meng Wanzhou at the request of the United States. As the Canadian court held a bail hearing on Friday, it seems that the CFO faces possible fraud charges regarding Huawei’s use of a subsidiary to sell product to Iran. Meanwhile, the Chinese government is expressing considerable concern around the matter. Stock markets reacted negatively in fear that the event may trigger further trade troubles between the US and China.

 

Date:  December 7, 2018

Source:  cnbc.com

Link: https://www.cnbc.com/2018/12/07/us-wants-huawei-cfo-to-face-charges-over-iran-sanctions.html

 

Discussion points:

1)  Do you or any of your classmates use a Huawei phone? What are its strengths and weaknesses?

2) How do you think this international situation will play out?

3) What are three common methods used to account for an investment in another company? Hint: see page 654 of  Wiley’s Financial Accounting: Tools for Business Decision-Making. 

Problems at GE

Posted by & filed under Accounting Careers, Financial Accounting.

Description:  For many years, General Electric (GE) was a darling of the stock market, hitting target after target and pursuing solid growth. But now, analysts are sounding alarm bells. There are liquidity concerns about GE, as well as an ongoing investigation of its insurance business. In addition, there may be possible tax issues to deal with. It’s no wonder the stock has reached a low last seen during the financial crisis.

Date:  November 30, 2018

Source:  yahoo.com

Link: https://finance.yahoo.com/news/ge-plunges-again-analysts-double-133827393.html

 

Discussion points:

1)  How does a company go from a place of high esteem to, as the story says, a place where it “can now barely go one full week without a negative headline?”

2) How would these current problems at GE impact an auditor’s decisions around audit risk? (For more information on this topic, consult Wiley’s Auditing: A Practical Approach.)

3) What are some common measures of liquidity, one area of concern at GE. (If you consult chapter 14 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can see a full suite of liquidity measures all in one location.)

This sounds familiar

Posted by & filed under Contemporary Business Issues.

Description:  Many of us have heard about Tim Horton’s franchisees suing parent franchisor, Restaurant Brands International. But now comes word that franchisees of Second Cup are suing their head office as well. Franchisees are unhappy with their profit performance, arguing that the parent’s use of an advertising fund may have harmed them. Franchisees are also upset that head office has not helped them make up market share lost to other chains.

Date:  November 26, 2018

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/second-cup-coffee-1.4921332

 

Discussion points:

1)  How do you rank Second Cup among Canada’s coffee chains?

2) Given that it probably impacts the public image of a brand like Second Cup or Tim Horton’s, why do you think we are seeing these cases of franchisees suing franchisors?

3) In chapter nine of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read how franchises are accounted for. What classification of assets does a franchise fit under on the statement of financial position?

GM Leaving Town

Posted by & filed under Canadian Economy, Corporate Social Responsibility.

Description:  Thanks a lot for that one! Several years ago, Canadian and US taxpayers bailed out General Motors (GM) during the financial crisis. But GM is back in the black and it is saying it needs to close its plant in Oshawa to retool for the future, leaving 2500 people in this city out of work. The impact is huge.

Date:  November 30, 2018

Source:  cbc.ca

Link: https://www.cbc.ca/radio/day6/episode-418-when-gm-leaves-town-loud-restaurants-the-hit-series-dogs-mummers-china-surveillance-and-more-1.4927175/gm-closures-what-happens-when-the-company-leaves-a-company-town-1.4927191

 

Discussion points:

1)  Do you know anyone who will be impacted by the GM shutdown? How will this closure impact lives?

2) Did you know that in the financial crisis bailout the governments of Ontario, Canada and the United States all held an equity position in GM, though they all later sold their shares? Do you think that perhaps they should have maintained their equity positions in order to influence company policy? See  https://www.cbc.ca/news/politics/general-motors-shares-conservative-government-sells-remaining-stake-in-automaker-1.3022822

3) In chapter seven of Wiley’s Managerial Accounting: Tools for Business Decision-Making, we learn a number of key concepts for decision making, such as relevant costs, sunk costs and opportunity cost. Discuss how GM executives may have employed these cost terms in making their restructuring decisions.

Financial misconduct ousts Nissan chair

Posted by & filed under Corporate Governance, Ethics.

Description:  Nissan Chairman Carlos Ghosn has been ousted for financial misconduct. This is shocking news for the man credited with turning the company around. The details of the investigation have not been made public, but one aspect seems to be a under reporting of Ghosn’s compensation. Ghosn has been arrested along with a Nissan director Greg Kelly.

Date:  November 19, 2018

Source:  nytimes.com

Link: https://www.nytimes.com/2018/11/19/business/nissan-carlos-ghosn-misconduct.html

 

Discussion points:

1)  What intrigued you about this story?

2) Why do you think company officials with so much to lose would risk partaking in this behaviour?

3) In chapter seven of Wiley’s Financial Accounting: Tools for Business Decision-Making, we read about internal control. What aspects of the system of internal control do you think may have failed Nissan in this embarrassing episode?

Do you like chocolate?

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?