Posted by & filed under Accounting Careers, CPA.

Elements of the CPA certification program

CPA Prerequisite Education Program (CPA PREP)

A program for those who have an undergraduate degree but not the prerequisites for the CPA Professional Education Program

The CPA Prerequisite Education Program (CPA PREP) is designed for those who have an undergraduate degree in a discipline other than accounting and lack some or all of the prerequisite courses required for admission to the CPA Professional Education Program (CPA PEP).

Delivered on a part-time basis to offer students maximum flexibility and accessibility, it uses a blend of on-line learning, self-study, and classroom learning. A modularized program, students complete only those modules they require.

With the exception of Quebec, CPA PREP is launching across Canada in summer 2013. It will be offered in Quebec in the fall of 2015

 Delivered on a part-time basis to offer students maximum flexibility and accessibility, CPA PREP uses a blend of online learning, self-study, and classroom learning. A modularized program, students complete only those modules they require.

Scheduling has been designed to allow students to complete Modules 5–12 as a complete program within a one-year period.

Click on link for information on CPA , Preparatory Modules

 

 The nationally developed, regionally delivered CPA Prerequisite Education Program consists of:

  All students must have either recognized academic credits or equivalent Module credits for Modules 1 – 4 BEFORE proceeding with ANY of Modules 5 – 10.

        CPA PREP Modules 1 – 4 are currently under development and will be launched in 2014. Until these modules are available, the current CMA foundation courses (such as Quickstart and Fundamentals) and CGA foundation and advanced education courses will be accepted as equivalents, as will recognized post-secondary institution courses covering the prescribed subject matter.

 

CPA Prerequisite Education Program (CPA PREP) FAQs

See below for a sample of Frequently Asked Questions:

For complete list of questions  click FAQ

What are the prerequisites for admission to the CPA Prerequisite Education Program?

Answer:  The only academic requirement for admission to CPA PREP is an undergraduate degree from a recognized post-secondary institution. Your undergraduate degree can be in any discipline.

How long is the CPA PREP program?

Answer: Designed for maximum flexibility and adaptability, CPA PREP is modular. The length of time required to complete the program will depend on the number of modules you need to complete, and the rate at which you choose to do so. Twelve modules will be offered, ranging in length from one to 14 weeks. You need take only the modules for which you have no recognized academic credit. Scheduling has been designed to allow students to complete Modules 5–12 as a complete program within a one-year period.

What is the passing grade for each module?

Answer: The passing grade for each module is 65%. Note that it is your final mark on the module, which may be based on various assessments, that determines your passing grade

What happens if I fail a module?

Answer: You have up to a maximum of three attempts to pass each module.

  • If you fail your first attempt at a module with a mark above 50%, you can rewrite the final examination. If you fail the second attempt, you will be required to retake the module in order to have a third and final attempt at the examination.
  • If you fail your first attempt with a mark less than 50%, you must retake the module before a second attempt at the examination is permitted.
  • Should you fail a third time, you could consider taking courses from post secondary institutions.

 

Discussion Questions:

1. Does becoming a CPA appear to be complicated, based on the above Modules that need to be completed?

2. Do you find the failures hard to accept especially if you have to return to University and complete the courses again?

3.  Will the CPA program enhance the credibility and professionalism of all accountants?

All information taken from the CPA website

Posted by & filed under Auditing, Corporate Restructuring, Corporate Social Responsibility, Fraud Accounting, International Accounting, Taxation, Taxation & Planning, Uncategorized.

Caribbean agency helped set up offshore companies connected to $230M scam

It’s a tale with the cloak-and-dagger intrigue of a Hollywood thriller: a $230-million heist, corrupt Russian police and government officials, prison beatings, a dead lawyer, Kafkaesque trials and a diplomatic spat between international superpowers.

And now, for the first time, secret files obtained exclusively in Canada by CBC News reveal how a Canadian-run offshore company in the Caribbean enabled the transfer of some of that money into a labyrinth of shell corporations around the world in a scandal known as the Magnitsky affair.

To read the complete article visit: CBC Business

Federal Budget passes a few weeks ago, to curb offshore

The federal government is taking aim at tax loopholes and Canadians who hide money offshore as part of a bid to boost its revenue base.

Follow the interactive Link below:How the rich hide money$

Tax havens explained: How the rich hide money

Super wealthy have vast array of options to take cash offshore

Recent leaks of secret banking information have helped authorities around the world crack down on tax cheats who go offshore, resulting in billions of dollars recovered for the public purse. Now, in one of the biggest ever leaks of financial data, the International Consortium of Investigative Journalists has released data on a whopping 120,000 secret offshore entities in 10 different jurisdictions.

Read more about how unscrupulous investors hire high-priced lawyers and financial advisers to move money offshore in the interactive below. Select the blue button to make choices and move through each step.

Read more of CBC’s coverage of the massive leak of offshore data and how tax havens sell secrecy in our special series.

During this coming week, follow the news on offshore accounts and the people that invest in them.

 

Discussion Questions:

1. What are some of the controls that government should implement to reduce offshore investments?

2. Why do you suppose  all those Tax Haven Countries exist?

3. Should it be illegal for Lawyers and Accountants to set up offshore accounts, no matter what the reason?

 

 

Posted by & filed under Taxation, Taxation & Planning.

TFSAs can be used for everything from new car to 1st house

The most popular alternative to an RRSP is probably the tax-free savings account, or TFSA, which the government introduced in 2009 and which many financial advisers say is the better option for middle- and low-income Canadians who want to put aside some of their income.

Of the people holding TFSAs, 44 per cent had made their maximum annual contribution of $5,000 for 2012, according to a poll released by Bank of Montreal (BMO) in November.

In 2013, the annual contribution limit has increased for the first time to $5,500. Most Canadians say they plan to contribute the maximum allowable amount within the next five years.

 

TFSAs popular but not used effectivelyTax Free Savings Accounts

Despite the lack of understanding that surrounds TFSAs, the numbers show that they are still attractive to income-earners. At the end of their first year of existence, TFSAs held a combined value of $17.4 billion in assets across five million accounts. By June 2012, the total asset amount had ballooned to almost $74 billion in 10 million accounts, according to Investor Economics.

Comparison of key differences between TFSA and Registered Retirement Savings Plans (RRSP)

 

 

TFSA vs. RRSP

Features TFSAs RRSPs
Withdrawals
  • Funds can be withdrawn tax-free at anytime for any purpose from the year you turn 18 (with a SIN).
  • The amount you withdraw in one year can be put back in a future year, over and above your contribution limit for that year.
  • You can withdraw from your RRSP at any time but will be taxed on the amount you take out, which is why most financial advisers suggest you wait until retirement to do so, when your overall tax hit is generally lower than when you’re working because you have less income.
  • If you do make a withdrawal before your RRSP matures, you will lose that contribution room forever.
Penalties
  • None for withdrawing funds.
  • If you contribute more than the limit for a given year, you incur a penalty of one per cent for each month you are over the limit.
  • Some investments inside a TFSA have their own penalties for early termination, called back-end loads, ranging from one to six per cent.
  • Any withdrawal from an RRSP prior to your retirement year is subject to a withholding tax at the time of withdrawal of 10-30 per cent depending on the amount withdrawn. The withdrawn amount is added to your income, and you may end up having to pay more tax on it when you do your return for the year. One way to avoid the penalty is to use the money to fund a first home or your education through the Home Buyers’ or Lifelong Learning plans.
  • CRA allows up to $2,000 in excess contributions beyond your annual limit as long as you were 19 or older during the year for which you are filing a return; beyond that, you may have to pay a penalty of one per cent per month.
Contribution Limits
  • Up to $5,500 annually (starting in 2013) — plus any unused portion from previous years. The annual contribution limit is indexed to inflation — but changes only when the indexed amount can be rounded up to the nearest $500.
  • Your personal contribution limit is based on earned income, pension adjustments and how much you contributed to RRSPs in previous years — up to a maximum contribution limit that changes each year. For the 2012 tax year, the maximum is $22,970.
  • You can keep contributing until Dec. 31 of the year you turn 71, and after that, you can contribute to a spouse’s RRSP until the end of the year he or she turns 71.
Deduction Limits
  • Money deposited in TFSAs is not tax deductible and neither is the interest on money borrowed to invest in TFSAs.
  • The maximum amount of RRSPs you can deduct from your taxes in a given year is equal to your contribution limit. You can choose to deduct less and use the unused portion to increase your contribution room the following year beyond the annual maximum.
Tax Benefits
  • Any interest, investment income, dividends and capital gains earned in a TFSA are not subject to tax — even if withdrawn.
  • Income earned is not taxed until it is withdrawn.
Investment Possibilities
  • High-interest savings account, mutual funds, guaranteed investment certificates, listed securities and other types of qualified investment products.
  • High-interest savings account, mutual funds, guaranteed investment certificates, listed securities and other types of qualified investment products.

 

More Flexibility

Tax Benefits: One of the key features of investing in a TFSA is the possibility of earning Interest and Capital Gains without being subject to tax.

One of the key reasons behind the popularity of TFSAs is the flexibility they offer. Money deposited in a TFSA can be withdrawn tax-free at any time.

People who invest money inside a TFSA don’t get an immediate tax break the way they do with an RRSP contribution, but investments inside a TFSA grow tax-free.

TFSAs are also good for people who are looking for alternative places to shelter money, says Judith Cane, a money coach based in Ottawa.

The accounts can also prove useful to those who suddenly inherit money and need somewhere to put it, while it earns interest tax free.

Saving for a new home

With the TFSA, young people and home buyers now have  the TFSA option.

By contrast, withdrawals to the TFSA can be repaid to the plan at any time, following the year of withdrawal.

Discussion Questions:

1. The TFSA was introduced in 2009, how many of you are familiar with the rules of TFSAs?

2. Now that you have read this article, are you more interested in Saving?

3. Is the option of using your TFSA to make investments tax free and incentive to invest?

For more detail information ,read the full Article written by Shenaz Kermalli, click on CBC News

Posted by & filed under Canadian Economy.

Federal Finance Minister Jim Flaherty tabled his 2013 budget Thursday. Here is a look at some of the highlights:

Click to view Video :  Federal Budget 

FlahertyFederal Finance Minister Mr. Jim Flaherty

 

 

 

 

Highlights

  • $900 million in new spending, no new taxes or tax cuts
  • $400 million in revenue from closed tax loopholes and enforcement
  • Creation of a new Canada Job Grant next year to train workers
  • New 10-year, $14.4 billion infrastructure fund starting in 2014
  • $241 million over five years for First Nations skills training
  • $1 billion over 5 years for aerospace industry and research
  • Snitch line and rewards to catch international tax cheats
  • Gas tax fund for cities to increase two per cent each year
  • Tariffs eliminated for most imported sports goods, kids’ clothing
  • For small business, extension of EI credit for new hires
  • $119 million over five years to transition homeless off the streets
  • “Super” tax credit to encourage young Canadians to donate

 Government takes aim at eliminating the Budget

The Federal Government has introduced a no frills budget that promises Canadian Jobs, reduce the deficit by 2015.

It also be more tight on new spending and more aggressive in collecting taxes, by reducing tax loopholes and creating a Snitch Line!

At the same time it will create new jobs, by improving skills training programs so that they are matched with jobs in the workplace.

Young Entrepreneurs

A total of $18,000,000 over two years for Canadian Youth Business Foundation to help young entrepreneurs grow their firms.

 

Discussion Questions:

1. We have discussed Tax Havens in the earlier sessions: Is this what Mr. Flaherty has in mind, when he wants to reduce tax loopholes and a Snitch hotline?

2. The job training program of $15,000 per new employee hire program is to stimulate job creation: Do you think  that $15,000 is enough of an incentive to hire and train new employees?

3. As you review some of the highlights: Discuss the most significant highlight that interests you!

Visit the following link for more information on the Federal Budget

Information taken from the Gazette article written by Mark Kennedy, on March 22, 2013 “Ottawa to help job seekers, clamp down on tax evaders”

 

Posted by & filed under Corporate Restructuring, Corporate Social Responsibility, Taxation & Planning.

THE rampant use of tax havens by large companies to reduce their tax bills has been moving up political agendas.

Tax Havens

The G8 and G20 have called for action to curb the practice. They worry that the international network of treaties and rules designed to avoid the double taxation of multinationals has instead allowed them to enjoy widespread double non-taxation. The Organization for Economic Co-operation and Development (OECD), which crafts international tax rules and guidelines, recently produced a report on profit-shifting and has promised to unveil firm proposals by the summer of 2013.

It is unclear precisely what the OECD will recommend, but it appears to be leaning towards patching up the existing framework rather than embracing an entirely new approach. Many independent tax experts—those who don’t work for multinationals—argue that this would be a missed opportunity, given how easy it has become to game the system.

How do we fix the tax avoidance problem?

One of the most intriguing (and refreshingly straightforward) comes from Jeffery Kadet, a former tax partner with Arthur Andersen, who now teaches at the University of Washington School of Law. Mr Kadet believes the answer lies in adopting a “worldwide full-inclusion” system of corporate taxation, an approach that has received surprisingly little attention, given its merits. Here’s his proposal:

Profit Shifting

We see in the media almost daily items about the detrimental effects of tax havens in general and corporate profit-shifting in particular. Profit-shifting is the structuring by multinationals of their cross-border operations to minimize taxes imposed in both their home countries and the countries where they actually operate, and the movement of those profits through legal planning into subsidiaries in low-tax jurisdictions. The goal is to achieve “double non-taxation”: no tax in countries where operations and revenues occur and no tax in the company’s home country.

So successful has big business been at achieving this goal—and thus eroding the tax bases of both leading economic powers and developing countries—that the issue has shot up the agendas of the OECD, the G8 and the G20. All are looking for solutions.

Some proposed solutions

Countries are urged, for instance, to tighten rules on “transfer pricing” of transactions between subsidiaries in different countries; or to strengthen their “general anti-avoidance rules”. Such rules might make profit-shifting a bit more difficult, but they won’t solve the problem. The same goes for country-by-country financial reporting, which would make profit-shifting easier to identify but wouldn’t eliminate the motivation to seek double non-taxation.

That motivation will only disappear if management knows that the group’s worldwide income will always be taxed, and that no amount of planning or developing complex schemes can avoid it. That is why the only real solution is to force current (ie, non-deferred) taxation on 100% of a multinational’s worldwide income, with no exceptions.

What mechanisms could accomplish this?

One that’s sometimes discussed is “unitary” taxation, under which all countries agree to a formula that would allocate the worldwide profits of each company among the countries in which it has operations, employees, assets and revenues. Each country would then tax its allocated share at its domestic tax rate.

Allocation Formula

This approach has merit. However, it is hard to imagine countries around the world agreeing on an allocation formula, including rules covering details like where to locate valuable intangible property. Then there’s the Herculean effort of implementing the system through domestic legislation in each country. And unless all countries signed up, the system would likely result in some double taxation and some double non-taxation.

Full Inclusion System

Fortunately there is another way forward, and it is one that could work even if adopted by less than all countries and in varying forms that reflect individual countries’ needs. It would require the countries that embraced it to abandon the “territorial” and “deferral” systems that have become popular and instead adopt a worldwide “full-inclusion” system.

 So what is a worldwide full-inclusion system? And how would it significantly dampen a company’s enthusiasm for profit-shifting?

Under this approach, each company’s home country would impose its normal corporate-tax rate on the group’s worldwide income. Importantly, this would include income earned by foreign subsidiaries, and deferral would not be allowed. A foreign tax-credit mechanism would prevent the double taxation that would otherwise occur from the same income being taxed once in countries where operations occur or revenue is earned and then a second time by the home country.

As a result, 100% of the group’s earnings would be subject to at least the home-country tax rate. Complex structures and schemes to move profits into tax havens would no longer be effective since even these offshore earnings would be swept up and taxed currently as earned by the home country. The motivation for such profit-shifting vanishes.

Can it actually be implemented?

 Economists may have mixed feelings about a worldwide full-inclusion system. They often point out that taxation systems that focus on the “source” of income have a number of theoretical attractions. Some also argue that “residency” (ie, home-country taxation of everything) is not a great basis on which to build a tax system because place of incorporation and management and control, the most typical determinants of residency, can be easily manipulated. However, it is clear in today’s globalised world that the profit-shifting incentive created by “source”-based taxation systems is so strong that it far outweighs any theoretical benefits these systems might provide.

Moreover, there are other benefits of adopting the full-inclusion system. It should create a more level competitive playing field within each country among homegrown multinationals, foreign multinationals that do business there and purely domestic businesses. The last of these are at a big disadvantage under the present system because they don’t have the same opportunities to reduce taxes using offshore structures. Under a full-inclusion system, there would be a more level playing field globally for multinationals from different countries as each would be subject to a minimum level of taxation as imposed by its home country. Competition will not be played out through which multinational is more creative or aggressive in its tax planning.

Another benefit is simplification. While the transition period could be messy, in the long run the new system would be more straightforward than today’s tax labyrinth.

Finally, there would be a feelgood benefit. Multinationals stand accused of not paying their “fair share” of taxes. With a worldwide full-inclusion system in place, the home country’s tax rate, which presumably defines “fair share”, would apply to all. So, in the future, big companies could avoid being labelled as “immoral” or “unethical”, at least in regard to their taxpaying habits.

To read the full article click , The Economist , A Modest Proposal

 Canada to clamp down on corporate tax dodging

Ontario is urging the federal government to help them clamp down on corporate tax dodging.

Ontario Finance Minister Charles Sousa is asking for help to close loopholes that allow corporations to avoid paying taxes by shifting their profits and losses across Canada.

He says it could bring in $200 million by 2017, according to the commission that made recommendations last year on how Ontario could slay its $12-billion deficit.

In his letter to Finance Minister Jim Flaherty and Revenue Minister Gail Shea, Sousa says some companies also shift profits earned in Ontario to foreign subsidiaries to avoid paying tax.

Click on CBC News for more details on, Ont. wants feds’ help closing corporate tax loopholes”

 Discussion Questions

1. Do you believe that corporate loopholes can be put in place to capture full taxation from public corporations?

2. The Full Inclusion System recommends taxing profits from all countries, is this approach feasible and achievable?

3. What system would you implement to ensure that corporations pay their fair share of taxes?

 

 

Posted by & filed under Accounting Careers, Corporate Restructuring.

 

Canada is falling behind other countries

When it comes to putting women on corporate boards, according to a report by TD Economics.

Corporate boardroom-table-istock

While participation in the labour force has increased significantly for women, that change has yet to be reflected at the top of Canada’s largest companies, according to the report.

Women represent just 11 per cent of board members on companies listed on the S&P/TSX composite index, which represents large publicly traded Canadian companies.

Women have much larger representations on the boards of foreign companies listed on many major worldwide stock markets.

Among the TSX-composite-listed companies, 42 per cent have no women on the boards of directors, while 28 per cent had just one female board member.

The TD report’s 11-per-cent figure is slightly lower than that of a similar survey by GMI Ratings, which puts the percentage of female board members at 13.1 per cent.

According to GMI Ratings, Canada ranked 9th among major industrialized nations for female board membership in 2011. That’s down from 6th place in 2009.

Percentage of women on boards of directors (2011)
Norway: 36.3%
Finland: 26.4%
Sweden: 26.4%
France: 16.6%
Denmark: 15.6%
Australia: 13.8%
New Zealand: 13.7%
Netherlands: 13.1%
Canada: 13.1%
Germany: 12.9%
United States: 12.6%

Source: GMI ratings

The decline has a number of implications

According to Beata Caranci, deputy chief economist at TD and lead author on the report.

“First, it is simply an unacceptable outcome on equity grounds. Second, and more troubling to economists, it implies a market failure to appreciate the skills and perspectives that women can bring to the table.”

Quotas?

What the report doesn’t call for is for quotas for women on boards, similar to what exists in countries like Norway and the United Arab Emirates.

“They are the antithesis of merit,” writes Caranci. “They also risk stigmatizing qualified women on boards as ‘tokens’.”

Instead, the report calls for a tough new “comply or explain” policy, which would require companies to put gender diversity policies in place when it comes to choosing new board members. It would allow companies to ignore those policies, but only if they explain why to shareholders.

Shareholder awareness and accountability

It also calls for companies to disclose the proportion of board members and senior executives that are female, so progress can be measured. The report says this would increase transparency, awareness and accountability on gender diversity.

While the number of women on boards at Canadian companies is falling behind, the number of women at the top of major Canadian companies is even lower.

None of the S&P/TSX 60 companies — the 60 largest publicly traded companies in Canada — have female CEOs. Only two, BlackBerry and Manulife, have boards of directors chaired by women.

Notable female CEOs in Canada include Linda Hasenfratz, head of auto parts manufacturer Linamar, Christine Day, CEO of Lululemon Athletica, and Heather Reisman, CEO of Indigo Books & Music.

 

Discussion Questions:

1. Why do you think there are fewer women as Chief Executive Officers?

2. Do you agree with the policy of instituting Quotas? Are quotas a workable solution?

3. Should shareholders’ be aware of the number of women who are members of the Board?

To read the complete article visit, CBC News

Posted by & filed under Auditing, MD&A.

Financial Collapse

Could auditors have prevented the failures of the 2008 financial collapse? A CICA/CPAB initiative analyzes proposals for an improved process


Illustration: Michael Austin

Audit quality

 

 

 

 

 

 

 

 

Does a corporate failure automatically mean there was an audit failure?

This is the underlying question linking the proposals for enhancing audit quality coming from policy-makers, standard-setters and regulators in the EU, the UK and the US — the regions hardest hit by the global financial market collapse of 2008. Even though no one has directly blamed the auditors or the audit process for creating the crisis, many were left wondering what role the auditors played and whether they could have prevented it. Were the auditors sufficiently independent, objective and skeptical?

But were regulators, managers, investors and standard-setters here in Canada worried about audit quality before international proposals were floated a couple of years ago?

Auditor independence
Internationally there are a half-dozen initiatives focused on independence largely aimed at addressing the threat of familiarity when audit partners and firms become too cozy and therefore accepting of management.

In August 2011, PCAOB (Public Company Accounting Oversight Board) issued a concept paper looking at mandatory audit-firm rotation but did not specify a time frame. In November 2011 the European Commission recommended mandatory firm rotation after six years when only one firm is involved, and nine years in the case of joint audits. It also suggested a move to audit-only firms and further restrictions and limitations on firms providing non audit services to the companies they audit.

Audit efficiency

“Ultimately you want the best and most efficient audit the auditor can conduct at a reasonable price. If you have auditors coming in to audit a large organization, it takes them two to three years to get familiar with the organization. You can’t then flip them out every three to five years. It doesn’t make any sense. You don’t have the efficiencies or the thorough review of an audit that is necessary,” says Patrick Crowley, executive vice-president and CFO of OMERS and a member of the Auditor Independence Working Group. “Completing a comprehensive review of the auditor and their work on a periodic basis would  provide enormous value for the organizations but also for the auditor and the investor who relies on the financial statements.”

In Europe, the call for a six-year mandatory rotation has been opposed and an alternative proposal of 25 years put forward. In the US, PCAOB has heard from 700 individuals and organizations and more than 90% of respondents do not support mandatory firm rotation. As well, the European parliament has nixed the call for joint audits and audit-only firms.
Audit reporting
Even though Canada did not experience the same fallout and problems other countries have as a result of the financial crisis and the Canadian Auditing and Assurance Board adopted International Standards on Auditing in 2010, there is an expectation gap in the Canadian marketplace between what some stakeholders, investors, analysts and perhaps even corporate preparers expect of the audit and what they are actually getting.
But there is a bigger problem with the proposals, says Sir David Tweedie, president of the Institute of Chartered Accountants of Scotland and former chair of the international and UK accounting standards boards, who spearheaded the overhaul of global accounting standards. Simply put, they don’t go far enough. “In my personal opinion, the audit report is seriously flawed,” he says. “Having been an audit partner at one of the Big Four I knew there were some excellent audits but you wouldn’t know that from the outside because you haven’t seen what happened behind the scenes. You know soon enough when there is a bad one because it’s splattered all over the financial pages. But the good ones disappear without a trace. That’s part of the problem. Companies and investors see the audit as just a commodity.

 Transparency

Why doesn’t the auditor say what kept him awake at night, what he concentrated on, the big judgments, the fights with management? That is what the investor needs but doesn’t get.

What I’m saying to the firms is this is an opportunity —  don’t fight it. Auditors are on the firing line because people aren’t sure what job they did. Present the facts, what happened, and there is your transparency and corporate governance.”

“Going concern” is perhaps the proposal that could have the most significant impact on auditors’ reports. It was also one the committee rejected. According to Davies, European regulators seem to be concerned with the need for auditors to comment on the viability of businesses going forward. This is not necessarily the view of the Auditor Reporting Working Group. What’s more, it’s not ultimately what the proposals do, says Davies. “There are two ways of preparing statements: on a going concern basis or on a liquidation basis if the company is being liquidated, which is rare.

What is being proposed in the UK and Europe is that the auditor state in the audit opinion that the statements are being prepared on a going concern basis. This is not an indication of the viability of the company going forward. All it says is that you are not using the liquidation basis of accounting.”

Another piece in the going concern proposals touches on material uncertainty and calls on auditors to state not only when there is a material uncertainty related to going concern but also when there is no such uncertainty. “This provides no useful information and we are worried about the risk of misinterpretation by the user,” says Jean Bédard, professor, School of Accounting and chair in corporate governance at Laval University, member of the Auditing and Assurance Standards Oversight Council and member of the Audit Reporting Working Group.

Transparency of the auditor process is another big focus area. To that end, the working group supports proposals to include descriptions of auditor responsibilities and it is exploring proposals aimed at expanding the information on which an auditor can provide assurance beyond the financial statement.

“If we are going to go down that path, work needs to be done to address how to go about providing that assurance, what is the framework we would use, what’s the information we need to provide assurance over,” says Davies. “Could you provide assurance over management discussion and analysis? Potentially you could. Is there demand for that? Is there value in that? I wouldn’t want to make that investment until we understood if users would view it as valuable and companies would be willing to compensate the auditor for it.”

 Discussion Questions:

1.  Would the rotation of auditors improve Audit Quality?

2.  Will transparency be improved if auditors describe the work that was done and the issues that most concerned the auditors during their audit?

3.  Will audit quality be improved if the auditors gave their opinion on the company’s “Going Concern” or would there be a higher risk of misinterpretation by the investing community?

 


Article written by Mary Teresa Bitti , see CA magazine article, www.camagzine.ca or click for the complete article

Posted by & filed under Taxation & Planning.

Tuition fees tax credit

Tuition fees qualify for a non-refundable 15% federal tax credit for 2012 if you pay them for yourself.

To be eligible for a credit, the fees must be paid to a Canadian university or college.

Generally any fees you claim must total more than $100 per institution.

Along with admission fees, eligible tuition fees include library and lab charges, examination fees, application fees, mandatory computer service fees, charges for certificates, diplomas and degrees, and the cost of books included in the fees for correspondence courses.

Also eligible are mandatory ancillary fees for health services, athletics and various other services ( but not student association fees or fees covering goods of value that you retain)

Fees paid to an education institution, professional association, provincial ministry or similar institution for an examination required to obtain professional status recognized by federal or provincial statute, or to be licensed to practise a profession or trade in Canada, are eligible for this credit.

Fees paid to  private schools for grade school or high-school education will not entitle you to a federal tax credit.

However, religious private schools may be able to provide a tax receipt for some of your tuition fees, treating that amount as a charitable donation, made toward the school’s religious instruction.

Education Amount

As a separate credit  from the tuition fees, you are entitled to a further federal education tax credit of $400 (worth $60) for each month you are in full-time attendance at a post-secondary educational institution.

For  part-time post-secondary students, the education tax credit is $120 (worth $18) per month that you attend an eligible program at least three consecutive weeks long and involving at least 12 hours of instruction per month.

Students with disabilities may qualify for the full $400 per month credit even if they attend the institution only part-time.

Textbook tax credit

Post secondary students eligible to claim the education amount above, can also claim a non-refundable textbook tax credit to help cover the costs of their textbooks. The amount you can claim for the credit is based on:

  • $65 for each month you qualify for the full-time education tax credit amount.
  • $20 for each month you qualify for the part-time education tax credit.

Transfer of unused student credits

If you are unable to use your tuition, education and textbook credits in 2012, because you have no tax to pay, up to $5,000 in combined federal credits can normally be transferred to your spouse or to a parent or grandparent.

Alternatively, you can carry forward any unused and untransferred tuition, education and textbook amount and claim them against your taxable income in later year,

Note, however, that such amounts carried forward cannot be transferred, only the student can claim them in later years.

Documentation taken from the KPMG website, click link. You may request your Tax Planning for you and your family, complimentary copy by writing to KPMG.

Here is the link to Canada Revenue tax guide for your 2012 personal taxes

Discussion Questions:

  1. Why does our Canadian Tax System have so many rules and regulations?
  2. Should we consider simplifying our Federal Income Tax Act?
  3. Based on the above do you find the textbook tax credit is sufficient to cover the cost of your textbooks?

 

Posted by & filed under Accounting Careers, Auditing.

Engineer Evan Vokes repeatedly raised concerns with company behind Keystone XL pipeline

 Whistleblower

A former TransCanada engineer says he reported its substandard practices to the federal energy regulator because he believed the company’s management, right up to the chief executive officer, refused to act on his complaints.

In an exclusive television interview with CBC News, Evan Vokes said he raised concerns about the competency of some pipeline inspectors and the company’s lack of compliance with welding regulations set by the National Energy Board (NEB), the federal energy industry regulator.

Vokes said he refused to back down and the workplace friction eventually took its toll.

“It was unbelievable the effect it was having on my health,” Vokes told CBC News chief investigative correspondent Diana Swain. “I was certainly on my way to a heart attack, or a stroke, for sure. There is no doubt about it.”

Vokes said he met with the Calgary-based company’s vice-president of operations, and he also wrote a detailed letter to TransCanada Corp. chief executive officer Russ Girling. Frustrated, he finally made a formal complaint to the NEB, a version of events confirmed in an interview by the board’s chief engineer.

“We understand he went right through the chain of command to the top in [TransCanada Pipelines Ltd.],” Iain Colquhoun said in an interview.

“Evan Vokes took the initiative to try and resolve the problem using the internal procedures and we would encourage people to do that,” Colquhoun said. “But having not got there, he took the extra step of involving the regulator, and we would certainly encourage that.”

 

Transcanada pipelinePipeline safety of ‘paramount importance’

The regulator warned the company it would not tolerate further infractions of regulations related to welding inspections, the training of pipeline inspectors and internal engineering standards. It also announced a further audit of the company’s inspection and engineering procedures.

‘We are confident that any remaining concerns the regulator has about compliance and pipeline safety will be unwarranted.’—TransCanada statement

“Pipeline safety is of paramount importance to the NEB, and it will take all available actions to protect Canadians and the environment,” the regulator stated.

In an email statement to CBC News, TransCanada said “our reviews concluded that the items raised by the former employee were identified and addressed through routine quality control processes well before any facilities went into service.

“We are confident that any remaining concerns the regulator has about compliance and pipeline safety will be unwarranted,” the TransCanada statement said.

The NEB is continuing its investigation of TransCanada and warned that if the company doesn’t fix the identified problems, it “will not hesitate to impose appropriate corrective actions.”

Lack of independent inspection questioned

Many of the complaints by Vokes focused on TransCanada’s practice of allowing its pipeline and fabrication contractors to hire the inspectors that would be inspecting the contractors’ work.

In 1999, the NEB imposed a regulation which requires the companies contracting the work, such as TransCanada, to supply independent inspectors to inspect the contractors’ work.

“There is an inherent conflict when a prime contractor does his own inspections,” Vokes said, especially when the project involves gas pipelines under high pressure because the consequence could be greater since it relates to public safety.

“In pipelining, there is a huge amount of stress for a very thin pipe,” he said. “You certainly should be paying attention to what is wrong with your pipe, making sure nothing happens to it, and there are no injurious defects to your pipe as it is being put into the ground.”

Vokes said the NEB regulation ensures contractors can’t pressure inspectors to sign off on work that is not up to code.

TransCanada has publicly admitted it did not always follow this regulation in the past, but said it was industry standard. Vokes said TransCanada believed independent inspection slowed production, driving up construction costs.

 To read the complete article: Click or Visit CBC news

If you have more information on this story, or other investigative tips, please email investigations@cbc.ca.

Discussion Questions:

1. Does the company follow good internal control practices pertaining to independent inspection of pipeline installations?

2. How would you rate the risk of poor inspection, High, Medium or Low? Support your decision.

3. What additional process controls would you put in place to ensure that no defective pipes or substandard installations occur during the pipelining process?

 

 

 

 

Posted by & filed under Canadian Economy.

Good-Bye Penny!

Effective February 4, 2013, the Canadian government will not distribute any more pennies and that may mean you may lose or earn a few pennies when making purchases in cash.

Cost Benefit Analysis

As part of the its Economic Action Plan 2012, the government announced that the Royal Canadian Mint will cease distribution of the penny to save the government $11 million a year. It was widely reported that producing the one-cent coin is costing the government 1.6 cents each.

Rounding up or down?

This means that the penny can still be used to pay for any money transactions but consumers and businesses should not expect pennies for change. Instead, cash transactions will be rounded up or down. If pennies are not available for cash transactions, the government guidelines urged businesses to round up or down “in a fair and transparent manner.”

For illustration purposes, the Mint suggested that if the transaction is $1.01 or $1.02, this can be rounded down to $1 while transactions of $1.06 or $1.07 should be rounded down to $1.05. If the transaction is $1.03 or $1.04, the total should be rounded up to $1.05, while transactions totalling $1.08 or $1.09 should be rounded up to $1.10.

Electronic or Cheque payments?

However, transactions done electronically — by credit card or debit — or through cheques will be not rounded.

Any taxes, fees or duties have to be calculated first before the final amount is rounded for cash transactions, according to the government guidelines. The rounding should also be done for the total and not for individual items

The government said the penny will remain legal tender like other Canadian coins

History

The February 2013 schedule was actually postponed. The government had earlier planned for a phase out of the penny in fall 2012.

Digital Journal earlier reported that the postponement was to allow consumers and businesses, including financial institutions and charities, to prepare for the transition.

On May 4, 2012, the last penny was struck in special ceremonies in Winnipeg by Finance Minister Jim Flaherty and Parliamentary Secretary Shelly Glover.

While the government will not issue any more new pennies, the government said the penny will remain legal tender.

On the government’s FAQ page, it reads:

While businesses do not have a legal obligation to accept any particular Canadian coins or bank notes in a retail transaction, the penny will continue to be legal tender like all other Canadian coins, and businesses may accept the coin as a means of payment if they so choose.

Consumers can deposit the pennies with their favourite financial institutions.

The Canadian penny was first minted by the British Royal Mint in London in 1858.

 

Information obtained from Digital Journal, Read more click on link: http://www.digitaljournal.com/article/342657#ixzz2Jr1T89hs

Discussion Questions:

1. Do you see any accounting changes for retail store operations?

2. What is your opinion on removing the Penny from circulation?

3. When you see a Penny on the floor, will you continue to pick it up , for Good Luck! or simply say Good-Bye Penny?