Wiley Accounting Updates

Posted November 6th, 2023 by Brent White & filed under Accounting Careers, Accounting Principles, Student life.

Description: The Royal Bank of Canada (RBC) has reached an $8 million settlement that will see it pay out this total, split among three different securities regulators. The Ontario Securities Commission Capital Markets Tribunal approved the settlement for RBC’s control weaknesses in differentiating between capital and operating expenditures in software development. RBC offered that the control deficiencies have been corrected.

Date: November 3, 2023

Source: winnipegfreepress.com

Link: https://www.winnipegfreepress.com/business/2023/11/03/osc-tribunal-approves-10m-settlement-over-rbc-accounting-practices

Discussion points:

1) Which bank seems to be the most widely used by you and your classmates?

2) Though the article does not have a lot of detail, what do you think may have caused this problem?

3) Pages 9-3 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses the difference between operating and capital expenditures. How would explain the difference to a friend who was not studying accounting?

Posted November 6th, 2023 by Brent White & filed under Accounting Careers, Auditing, Ethics.

Description: In what could be described as somewhat of an embarrassment, Big Four audit firm Deloitte has been fined $1.59 million by CPA Ontario, the governing body for the accounting profession in that province. Deloitte’s problem was that some employees engaged in “deliberate backdating” of audit working papers on close to 40 audits. Somehow the auditors were able to work around the software controls to backdate work to make it appear it was performed or reviewed earlier than in reality. CPA Ontario said “Backdating obscures when and what work was performed and reviewed,” creating “questions about the accuracy or timeliness of audit documentation and the quality of the audit.”

Date: November 2, 2023

Source: thestar.com

Link: https://www.thestar.com/business/deloitte-fined-1-59-million-by-ontario-regulator-after-some-employees-altered-computer-clocks-to/article_561fe53c-f68b-5089-9e46-fc7f533e2d2f.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) As someone studying accounting, how might this story impact your choice of employer after graduation?

2) The story tells us Deloitte became aware of the problem in March 2018, reported it to CPA Ontario in September 2019, and reached the settlement last week. What opinion do you have on this timeline?

3) Pages 10-10 of Wiley’s Financial Accounting: Tools for Business Decision-Making mentions Deloitte in the Analytics Mindset inset box. What does this section tell us regarding Deloitte?

Posted October 30th, 2023 by Brent White & filed under Data security, Internal control, Student life.

Description: If online security were a university course, many Canadian post-secondary students would have a failing grade, at least according to survey results from RBC’s Students and Fraud Poll. Eighty percent of the students admit to vulnerabilities, including 28% who had shared their passwords on debit and credit cards. With fraudsters becoming more resourceful, it’s time for students to step up by improving their own security measures.

Date: October 23, 2023

Source: thestar.com

Link: https://www.thestar.com/business/canadian-students-receive-failing-grade-for-fraud-prevention-and-sharing-passwords-new-survey-finds/article_43d5b7ce-c18c-52bf-970e-4439cf076138.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) Have you or your classmates ever been scammed in regard to your own banking information?

2) What tips do you have for protecting your cards, bank apps, and other important elements of your own financial life?

3) Illustrations 7.3 and 7.4 of Wiley’s Financial Accounting: Tools for Business Decision-Making show us control activities over cash receipts and cash disbursements? Which of these do you think can be adopted by students in looking after their own cash?

Posted October 30th, 2023 by Brent White & filed under Accounting Principles.

Description: Electronics retailer Best Buy is recalling one million pressure cookers after 17 customers have experienced burns. Best Buy will not provide replacements or refunds if your return the item to the store. Rather, the company insists consumers register online to receive satisfaction.

Date: October 27, 2023

Source: ctvnews.ca

Link: https://www.ctvnews.ca/business/best-buy-recalls-nearly-1-million-pressure-cookers-after-reports-of-17-burn-injuries-1.6620286

Discussion points:

1) Have you ever had a consumer item that was recalled due to a safety issue?

2) If you were a senior financial officer at a company in a situation like this, how would you advise management to proceed?

3) In chapter five of Wiley’s Financial Accounting: Tools for Business Decision-Making we saw a discussion on refund liabilities. On page 10-10 we see a discussion of a particular provision that would be germane to Best Buys. What is the example given there?

Posted October 30th, 2023 by Brent White & filed under Accounting Careers, Financial Accounting, Marketing & Strategy, Student life.

Description: Air Canada has been offering disgruntled customers cash or vouchers to settle their claims for travel interruptions. Thousands of Canadians have taken their disputes with Air Canada to the Canadian Transportation Agency (CTA), piling up a backlog of over 60,000 claims for compensation for disrupted travel and other matters. Air Canada maintains it pays customers who have legitimate claims and that is making these current offers to address the huge queue in the system. An Edmonton, Alberta university student, Samantha Smith, described Air Canada’s offer to her as “insulting,” noting she “felt very angry and just really dismayed” at what she saw as a low-ball offer from the airline.

Date: October 27, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/air-canada-compensation-claims-1.7008860

Discussion points:

1) Have you or your classmates ever filed a claim with the CTA about a disappointing airline experience?

2) What do you think about Air Canada’s strategy on this issue? Will it help them in the marketplace?

3) Pages 10-9 through 10-11 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses the subject of provisions and contingencies. What type of financial statement treatment do you think Air Canada should use regarding these claims at the CTA?

Posted October 23rd, 2023 by Brent White & filed under Accounting Careers, Sustainable Development.

Description: A&W appears to be taking a lead in environmental action by bringing to market an exchangeable beverage container through its new One Cup program. For a small $3 fee, the customers can receive this reusable cup that can be exchanged for a clean one each time they order their favourite A&W beverage. In addition, using the exchangeable cup also nets the customer a 20% discount. It’s all part of an effort to reduce the one billion cups hitting landfills in Canada each year from food vendors. A&W had shown similar leadership on this last year when it introduced a rather strange looking lidless cup suitable for composting. https://www.newswire.ca/news-releases/weird-looking-world-changing-a-amp-w-launches-canada-s-first-lidless-fully-compostable-coffee-cup–882596624.html

Date: October 16, 2023

Source: globalnews.ca

Link: https://globalnews.ca/news/10027312/aw-resusable-cup-program/

Discussion points:

1) What do you think about this new A&W xchangeable cup? Would you be willing to put your $3 down to join the program?

2) As someone looking forward to a career after graduation, does your potential employer’s environmental footprint have any influence on which company you might choose to work for?

3) Page 6-25 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses Lululemon’s voluntary reporting on how climate risk can impact its financial statements. The section notes that many companies do not have this type of voluntary disclosure on risks associated with client change. Do you feel that public companies should be required to report this type of information?

Posted October 23rd, 2023 by Brent White & filed under Internal control, Student life.

Description: According to Clint Mahlman, CEO of pharmacy chain London Drugs, despite a rise in violent shoplifting incidents in Vancouver, the business has no plan to close any stores in the city. “We are at a crisis point in retail,” Mahlman noted. The losses from theft amounts to “tens of millions” per year, and the safety of staff is a concern as well, given that workers have been physically assaulted, including with hatchets and knives.

Date: October 18, 2023

Source: globalnews.ca

Link: https://globalnews.ca/news/10034649/london-drugs-vancouver-shoplifting/

Discussion points:

1) Have you ever witnessed a violent theft or shoplifting incident at your university town?

2) If you were a senior financial officer at a firm like London Drugs, what type of information would you assemble to help executives make decisions on whether not to close locations?

3) Section 7.1 of Wiley’s Financial Accounting: Tools for Business Decision-Making offers descriptions of several types of internal control activities that businesses can employ. Which activities could be considered for a retailer facing theft problems and the related threats on employee safety?

Posted October 23rd, 2023 by Brent White & filed under Contemporary Business Issues, Ethics, Marketing & Strategy, Student life.

Description: Watch out for “shrinkflation,” that practice of producers shrinking package sizes to compensate for increasing costs. Instead of passing on the increasing costs to the end consumers, these companies shrink the box size. Shrinking packaging causes consumers, like Ellyn Newall of Edmonton, to feel duped. After getting her grocery order home, Ellyn realized Post’s Honeycomb had produced a new taller box that actually had less volume of the tasty cereal than the old one. It is doubtful that Newall is the only Canadian to feel let down by this packaging practice.

Date: October 18, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/shrinkflation-government-1.6996673

Discussion points:

1) Have you and your classmates encountered any “shrinkflation?” in your grocery shopping?

2) Do you think the government needs to intervene regarding the practices of producers in shrinking package sizes rather than simply raising prices to cover increased costs?

3) Appendix B of Wiley’s Financial Accounting: Tools for Business Decision-Making shows us the financial statements of Sobeys, a major Canadian grocery chain. Chapter Five opens with a vignette discussing Loblaws, a major rival of Sobeys. Do you think one of these grocery chains could gain a strategic advantage over the other by insisting that its suppliers take action on shrinkflation?

Posted October 16th, 2023 by Brent White & filed under Financial Accounting.

Description: If you happen to be one of the fortunate fans to have had a ticket to Wednesday’s NHL season opener for the Leafs and the Habs, you may have noticed the new beer stand where you swipe your way in with a credit card, then AI tracks what you pick up, before charging your card. It beats standing in line, and it’s also one of the highly-noticeable renovations carried out at the Air Canada Centre prior to the Leafs and Raptors embarking upon another season. Unless you have a spare $60,000 though, you may not get to see the new Mastercard lounge, where the patrons can indulge in luxury foods of various sorts. According to management, however, none of the $350 million in upgrades will be paid for out of ticket price increases. Exactly how fans can verify this assertion was not discussed in the Toronto Star article.

Date: October 10, 2023

Source: thestar.com

Link: https://www.thestar.com/sports/raptors/four-ways-the-scotiabank-arena-renovations-will-impact-the-average-fan/article_063d9d3b-b03b-5d6c-8923-381632c1bdf1.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?

2) If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?

3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?

Posted October 16th, 2023 by Brent White & filed under Accounting Careers, Canadian governments, Student life.

Description: According to the Parliamentary Budget Officer (PBO), a national pharmacare program with one single public sector payer would cost taxpayers an additional $11 billion in its first year. Currently, prescription drugs are paid through a variety of government, employer, and citizen contributions, with the total governments’ share at 46% and private insurance companies picking up another 40%. Incremental costs of a publicly-funded program are projected to rise to $13.4 billion by year four, though the program would reduce drug prices by creating one large organization with more influence on drug prices.

Date: October 12, 2023

Source: ctvnews.ca

Link: https://www.ctvnews.ca/health/pharmacare-would-cost-public-sector-billions-more-a-year-but-save-economy-money-report-1.6598677

Discussion points:

1) Do you have some form of prescription drug coverage while you are at university?

2) Are you and your classmates in favour of a national, single-payer prescription drug program?

3) Page 5-1 of Wiley’s Financial Accounting: Tools for Business Decision-Making opens with vignette discussing Loblaws and its subsidiary, Shoppers Drug Mart, both of which retail prescription drugs to Canadians. If you were a financial officer at one of these companies, and you were asked to prepare a paper for senior management outlining the company’s position as either for or against the single-payer option, what do you think you would recommend?