Wiley Accounting Updates

Posted December 18th, 2023 by Brent White & filed under Accounting Careers.

Description: It certainly is not something we see too often; a former deputy auditor general suing the Office of the Auditor General of New Brunswick for wrongful dismissal. Janice Leahy, New Brunswick’s former deputy auditor general, was let go from her position and replaced, but there has been little, if any, word from the auditor general, Paul Martin, about this matter or why such a large percentage of his staff have left the office in the last 12 months. Leahy’s claim states the “termination was retaliatory in nature given the positions taken by the plaintiff.” But details are scant, and the public, as well as the auditor general’s clients, the Members of the Legislative Assembly (MLA), may have to wait until the courts come forward with more detail in order to better understand the situation.

Date: December 5, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/new-brunswick/auditor-general-former-deputy-firing-1.7048476

Discussion points:

1) Have you ever seen a case where an auditor general’s office was sued?

2) If your were an advisor to a MLA who was relying on the auditor general’s reporting to do their job, what might you recommend to get a better picture of what was happening?

3) Pages 10-9 through 10-11 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses accounting for provisions and contingent liabilities. What type of disclosure, if any, do you think the Office of the Auditor General of New Brunswick should include in its financial reporting regarding this lawsuit?

Posted December 11th, 2023 by Brent White & filed under Fraud, Internal control.

Description: An auto theft ring appears to have benefited from inside information from Service Ontario, according to news reports. Operation Safari under the direction of the Toronto Police has been looking into an auto theft ring since earlier this year, and it has discovered that the workers inside Service Ontario would provide the thieves with driver and vehicle information that would make it easier to flip the vehicles in private sales transactions. An earlier probe, beginning in 2020, had shown Service Ontario employees were complicit in arranging modifications of vehicle records when the auto theft rings changed the Vehicle Identification Numbers (VIN) to make the cars appear legitimate.

Date: December 7, 2023

Source: nationalpost.com

Link: https://nationalpost.com/news/canada/service-ontario-employees-auto-theft-ring

Discussion points:

1) Have you ever been the victim of a car theft?

2) The VIN once seemed like a pretty effective control to detect vehicle theft. What would you recommend to improve things if you were an accountant with the insurance industry?

3) Page 6-7 of Wiley’s Understanding Financial Accounting tells us about the limitations to internal control. What are they?

Posted December 11th, 2023 by Brent White & filed under Ethics, Managerial Accounting, Student life.

Description: Canada Bread has responded to a class action lawsuit centred on alleged price-fixing in the bakery business by essentially saying, “blame it on our former parent company, Maple Leaf Foods.” Michael McCain, a former Maple Leaf CEO, was having no part of this in his statement, saying, “We continue to believe that the pricing practices of Canada Bread were responsible, consistent with industry practice, and above all, lawful.” In June this year Canada Bread had been fined $50 million after having plead guilty under Competition Act charges for price-fixing.

Date: December 8, 2023

Source: ctvnews.ca

Link: https://www.ctvnews.ca/business/canada-bread-denies-price-fixing-scheme-in-court-filing-points-finger-at-maple-leaf-1.6678876

Discussion points:

1) Do you buy commercial bread at the store from one of the large manufacturers, like Canada Bread?

2) How would paying $1.50 extra per loaf impact your budget as a student?

3) Illustration 9-1 of Wiley’s Managerial Accounting: Tools for Business Decision-Making depicts important pricing factors for companies making pricing decisions. What are the four big factors pictured for us in this graphic?

Posted December 11th, 2023 by Brent White & filed under Accounting Principles, Student life.

Description: A few years back, when Adrian Ma visited his uncle in Hong Kong, he was gifted with a bottle of Glenlivet, Special Jubilee Reserve, a 25 year old whisky bottled in 1977 to honour Queen Elizabeth’s Silver Jubilee. At the time of the gift, Adrian’s uncle told him “I don’t have a reason to open this; You should have it.” Ma found the right occasion this summer, at a cottage, surrounded by friends at a group 40th birthday celebration.

Date: December 10, 2023

Source: cbc.ca

Link: https://www.cbc.ca/radio/sunday/opening-rare-scotch-whisky-bottle-1.7042544

Discussion points:

1) Are any of your classmates fans of Scotch whisky?

2) If your uncle had gifted you a $3,000 bottle of whisky, would you save it for some special occasion or put it on the market?

3) Page 2-4 of Wiley’s Financial Accounting: Tools for Business Decision-Making educates us regarding the operating cycle of various types of companies. What do you think the length of the operating cycle of a distillery might be?

Posted December 4th, 2023 by Brent White & filed under Canadian Economy, Student life.

Description: The Lipstick Index is perhaps one of the most unusual measures of economic performance you may have encountered. Essentially, this measure says that when times are tough, consumers will still avail themselves of smaller luxuries like skin care and perfumes in the face of cut backs on larger purchases. Leonard Lauder, the former CEO of cosmetic firm Estée Lauder, was the first to coin the term. Economists at California State University established the phenomenon was confirmed by economic data emerging from the 2008 financial crisis recession .

Date: November 29, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/calgary/lipstick-index-beauty-sales-1.7041218

Discussion points:

1) Had you ever heard of this Lipstick Index?

2) Do you think the principles of the Lipstick Index are valid in the lives of you and your classmates?

3) Page 5-1 of Wiley’s Financial Accounting: Tools for Business Decision-Making introduces us to Loblaw’s subsidiary corporation Shoppers Drug Mart. What percentage of Shopper’s revenue comes from its cosmetics trade?

Posted December 4th, 2023 by Brent White & filed under Accounting Careers, Canadian Government.

Description: The government of Canada and online giant Google have finally reached a deal regarding use of Canadian news on the web. The deal comes three weeks before the federal government’s Bill C-18, the Online News Act, comes into effect. Google has agreed to pay $100 million a year to Canadian news organizations for use of their content on its powerful platform. The other large holdout – Meta (Facebook) – has left the negotiating table without indicating when, and if, it may return.

Date: November 29, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/politics/google-online-news-act-1.7043330

Discussion points:

1) How do you and your classmates get your Canadian news?

2) If you were an accountant tasked with distributing the $100 million to Canadian news organizations, what model do you think you would recommend?

3) Early in chapter one of Wiley’s Financial Accounting: Tools for Business Decision-Making we are given information about a number of famous Canadian accountants. What is the name of the Canadian accountant who serves as country manager for Google Canada?

Posted December 4th, 2023 by Brent White & filed under Accounting Careers, Canadian governments.

Description: Universities in Ontario are banding together to try and find cost savings through efforts like joint procurement and combining course offerings, all in the shadow of provincial government pressures to find efficiencies before they will be allowed to increase tuition fees. But the Council of Ontario Universities stated the fiscal situation is becoming “increasingly untenable,” with several schools facing very large deficits. Jill Dunlop, the government minister responsible for universities has received a report from a high-profile panel that recommends a 10% increase in the grants to universities along with a 5% tuition increase. Dunlop’s panel included a look at university administrative costs as part of its review, noting that this area has “considerable room for improvement.”

Date: December 1, 2023

Source: thestar.com

Link: https://www.thestar.com/politics/provincial/ontario-universities-are-running-out-of-money-and-time-report-says/article_7f7c8925-173c-5f57-8411-836283a5d44b.html

Discussion points:

1) Are you a student at an Ontario university? If so, how have these financial issues impacted you?

2) Do you think the Ontario government has been correct in insisting on increased efficiency in the university sector?

3) Pages 4-1 and 4-2 of Wiley’s Financial Accounting: Tools for Business Decision-Making talks about accounting at Western University in London, Ontario. What are the various types of revenues and expenses for a university that are mentioned in this vignette?

Posted November 27th, 2023 by Brent White & filed under Accounting Careers, Accounting Principles.

Description: The governments of Canada and Ontario are taking some heat after revelations that 1,600 workers from South Korea will be arriving in Windsor, Ontario to install equipment at the NextStar battery plant. Canadians may be rightly concerned, as the provincial and federal governments have contributed billions to bring the battery plant and the related jobs to Southern Ontario. Danis Lee, the CEO of NextStar, has noted, however, that the company will be hiring thousands of Canadians.

Date: November 20, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/windsor/stellantis-lg-energy-nextstar-electric-vehicle-battery-1.7033732

Discussion points:

1) Do you think that the NextStar battery plant should be allowed to bring in so many temporary foreign workers during the construction phase?

2) What do you think of our governments investing our tax dollars to create jobs?

3) Page 9-5 of Wiley’s Financial Accounting: Tools for Business Decision-Making tells us about various costs that can be capitalized in the construction of a building, such as manufacturing facility. What type of accounting treatment is acceptable for the interest costs on any borrowing for such a project?

Posted November 27th, 2023 by Brent White & filed under Fraud, Internal control, Student life.

Description: The self-checkout may be in a bit of trouble as some retailers are reconsidering the future of this mode. Increased losses due to shoplifting is certainly a factor for retailers to consider. Adrian Beck of the University of Leicester has studied self-checkouts for over ten years, and he notes they may account for one quarter of shoplifting per grocers’ estimates. While some Canadian Walmarts still have self-checkout, in 2018 the U.S. side of the retail giant cited “unacceptable losses” and pulled its ‘scan-and-go’ checkout.

Date: November 24, 2023

Source: ctvnews.ca

Link: https://www.ctvnews.ca/business/big-box-retailers-are-rethinking-their-self-checkout-strategies-here-s-why-1.6659795

Discussion points:

1) Are you a regular user of self-checkout?

2) Some consumers like the convenience of self-checkout. Those of a different viewpoint say they miss the human interaction with a cashier, and, still others feel they are being forced to take-on unpaid work, so to speak. What do students in your classroom think?

3) Page 1-16 of Wiley’s Managerial Accounting: Tools for Business Decision-Making discusses Walmart’s relationship with its suppliers. What tool does Walmart use to evaluate its suppliers’ performance?

Posted November 27th, 2023 by Brent White & filed under Accounting Careers, Student life.

Description: If you are post-secondary education student benefiting from of a Registered Education Savings Plan (RESP), you may have some good news for your finances. The federal government has upped the amount full-time students can withdraw from the education assistance payments (EAP) portion for their first 13 weeks of study from $5,000 to $8,000. The EAP represents the government’s contribution to the RESP above the principal portion contributed by parents or grandparents. After those initial 13 weeks, the cap comes off; students in full-time academic study can use as much of the EAP as required. While the EAP is taxable to the student, the principal portion is not as the contribution comes out of the parents’/grandparents’ after-tax funds.

Date: November 26, 2023

Source: financialpost.com

Link: https://financialpost.com/personal-finance/how-students-more-money-post-secondary-school

Discussion points:

1) How many of your classmates are the beneficiary of a RESP? Were you aware of this positive news regarding the EAP?

2) The article noted roughly 50% of families with children under 18 have signed up for RESPs. If you were advising a government minister who wanted to expand the uptake of these plans, what would you recommend?

3) Chapter 4 of Wiley’s Financial Accounting: Tools for Business Decision-Making opens with a vignette about how Western University in London, Ontario deals with the closing of its books at its April 30 year end. How does Western deal at year end with fees paid for the upcoming intersession?