Description: Shareholders are beginning to flex a bit more muscle in Canada when it comes to executive compensation. In short, a recent survey of shareholder voting at some of Canada’s largest companies shows that voters may be aligning executive pay with return to shareholders.
Source: Globe and Mail.com
Date: September 7, 2014, last updated September 8, 2014
Welcome our new Wiley Accounting Weekly Update contributor, Brent White
Brent White is an Assistant Professor in the Ron Joyce Centre for Business Studies at Mount Allison University in Sackville, New Brunswick. Brent is a Chartered Accountant with an MSc in Management from the Queen’s School of Business in Kingston, Ontario. He is a relatively recent entrant into full-time academic life, having worked for over 20 years at the Office of the Auditor General of New Brunswick, following 7 years with one of the former Big Eight firms. His research interests include historical developments in public sector auditing, public sector accountability, and auditor independence. Brent enjoys this writing assignment, and, of note, he is also a published author of short fiction and personal essays.
Labour Day is often seen as a point of transition. Cottages are closed down for the year. Camping trailers are returned to storage for the winter. Summer turns into fall. This September 1, 2014, Labour Day marked another transition of sorts in New Brunswick. September 1st this year marked the official launch of the Chartered Professional Accountants (CPA) of New Brunswick. This new organization is the result of the merger of three legacy accounting groups in NB – Chartered Accountants (CA), Certified General Accountants (CGA) and Certified Management Accountants (CMA).
New Brunswick accountants, along with their colleagues in the other Canadian provinces, have been engaged in this merger process for the last several years. There has been substantial media coverage of various aspects of the merger. But one point of interest regarding the official start date of CPA New Brunswick was the general absence of discussion of the September 1 launch. A Google search resulted in zero hits for news surrounding the official combination of the three organizations.
Several factors might explain this quiet merger. Perhaps it was that the matter was lost in the midst of the Labour Day holiday and the busyness of an ongoing election campaign in NB. Possibly the “big” news was the actual passing of the merger legislation in the NB Legislature, and now this official start date was going unnoticed. Or, there may be other factors at work.
1) Why do you think the official launch of CPA New Brunswick went unnoticed?
2) If you are a student, do you see yourself pursuing a career as a CPA? Why or why not?
3) What do you think are the advantages of a merged accounting professi0n? The disadvantages?
Cloud computing has seen a huge increase in popularity in recent years – even if we aren’t quite sure where the cloud is or what is going on there. The convenience of cloud computing, and rapidly dropping storage costs, have made it an attractive option for businesses. And with big name suppliers like Amazon and Apple providing free storage for purchasers of their devices, more and more consumers are trusting their data to the cloud.
Trust may have taken a major hit last week when reports surfaced that personal intimate photos of approximately 100 female celebrities had been stolen from Apple’s iCloud and uploaded to an internet site by a hacker. These celebrities had apparently used iCloud to store photos taken or stored on their iPads or iPhones.
Apple acknowledged the photo hack problem on September 1st. An article on Mashable.com explored the notion of potential security weaknesses in Apple’s ‘find my phone’ feature that may have been exploited in this rather embarrassing episode. Responding to the concerns raised throughout the week, Apple CEO Tim Cook spoke to the security issues in an interview with the Wall Street Journal. Cook promised improvements in Apple’s iCloud security, a departure from Apple’s downplaying of the incident earlier in the week.
Meanwhile, Apple investors may be wishing that the whole situation could just disappear. Rumours have been circulating that Apple will soon announce a new iPhone. This iCloud hack may be somewhat of a distraction just in front of Apple’s big announcement of new products on September 9.
What do you think?
1) Do you use any cloud services? What security concerns do you have?
2) If you were the auditor of a company that used cloud computing services, what would be some of the audit issues you might have to deal with?
3) How will this celebrity photo security hack impact Apple’s launch of new products on September 9?
A CBC News story from September 1, noted how a a small – but increasing – number of employees are beginning to accept the online quasi-currency Bitcoin as payment for their wages. This is evidence perhaps of the growing acceptance of Bitcoin by merchants and the increasing discussion of Bitcoin currency exchanges. Bitcoin began in 2009, and has been gaining more widespread attention in 2013. (See this link for a short video on Bitcoin’s operations).
Shrad Rao, the CEO of Waterloo, Ontario, payroll processing firm Wagepoint, stated that last year they began offering a Bitcoin payment option to employees of some clients. Rao said this was only a “side project”, and Wagepoint was really not expecting any uptake by employees. But, employees from ten of Wagepoint’s clients have taken advantage of the Bitcoin option to date. Not surprisingly, most employees opting to accept Bitcon are from firms in the technology sector.
Wagepoint allows participating employees to take all, or part, of their wages in Bitcoin. Canadian payroll taxes are deducted from the gross pay by Wagepoint before the employee can take any of the remainder in Bitcoin. Meanwhile, the Canada Revenue Agency’s (CRA) position is that Bitcoin is not a currency. Rather, it views Bitcoin as property. In other words, a payment in Bitcoin is viewed by CRA as a barter transaction. It is still taxable, however, and those receiving it as payment of wages are expected to declare the Canadian dollar value of the amounts received on their tax returns.
1) Would you be interested in accepting some or all of your pay in Bitcoin? Why or why not?
2) If you were an accountant at one of these firms, how would you measure the value of these Bitcoin payments when you were recording the payment of payroll?
3) What do you think the future of Bitcoin, the digital currency, might be?
From August 26th to 30th, Canada’s smallest province, Prince Edward Island, hosted the 55th annual conference of Canadian premiers. This gathering is sometimes also know as the Council of the Federation. During these sessions, the various premiers discuss issues of common interest, and they communicate with the public on the results of their deliberations through news releases and communiques.
Perhaps one of the unexpected outcomes of this year’s meeting was a controversy over the approximately $450,000 in conference costs funded by various corporate and union sponsorships. The Ottawa Citizen first raised the issue. Then, a local PEI daily paper, The Guardian of Charlottetown, began pressing the host premier, Robert Ghiz on the appropriateness of the corporate funding. The Guardian’s front page article of Thursday, August 28, captured much of the controversy through its title alone “Premiers conference costs, corporate sponsorship raise eyebrows.”
Premier Ghiz responded that he did not see any conflict of interest in having the corporate sponsorship for this event. Although the sponsorships allow companies to attend various receptions and social events as part of the conference events, Premier Ghiz did not seem to feel that the companies gained any influence via their sponsorships. According to the Guardian, Robert Ghiz stated “In my opinion, it’s about supporting democracy.” He went on to add that corporate sponsors save the taxpayers’ money. When asked about a reported purchase of expensive Shania Twain concert tickets for a number of conference attendees, Premier Ghiz replied that he did not know the details on how the sponsorship money was spent.
Others, however, might not feel quite as comfortable with this arrangement as the Prince Edward Island Premier does. John Bradley, a retired military officer and long-time observer of the PEI political scene, indicated some displeasure with Premier Ghiz’s rationale. Further, auditing students have long known that independence must be both in fact and appearance. One would have to ask to what extent the corporate sponsorship of the premiers’ gatherings might impair the appearance of our political leaders’ independence.
What do you think?
1) What do you think about the corporate sponsorship of the Premiers conference?
2) What parallels do you see between this news story and the issue of audit independence for auditors of financial statements?
3) Assume for a moment you are in a position of authority at the head office of one of the potential corporate sponsors of this premiers conference. What would be some of the key factors you would consider in making a decision whether to contribute?
Where did the summer go? That might be one of the questions both students and parents are asking themselves as students head off to campus for another year of university. Along with meeting friends – old and new – registering for classes, buying textbooks and engaging in extracurricular activities, students are buzzing around campuses already, launching the start of another academic year. The where did the summer go question will quickly be replaced with when is that first assignment due? Or, how do I do APA reference style? Perhaps even, where did I leave my iPad?
But with along with all this activity, and all these questions, many students are dealing with the reality of how do I pay for all this education? The Canadian Federation of Students has raised concerns about the mounting debt levels of Canadian students. Tbe Federation notes that student debt in Canada is increasing at a rate of $1 million per day. Student debt levels are higher than ever. Meanwhile, middle class incomes have been dropping, making it harder for parents to help out. And governments across the country appear to be engaging together in a discourse of scarcity, blunting hopes that public programs might help students with the affordability of education. The Federation notes that students in Ontario and the Maritime region have the highest debt levels (averaging $28,000). A notable exception, the Government of Newfoundland and Labrador, draws praise from the Federation for its efforts in replacing loans with grants.
One of the biggest Canadian business stories of the past week – if not the past year – has to be the announcement last week that Burger King and private equity firm 3G Capital are purchasing Canada’s favourite coffee chain, Tim Hortons. The price: a whopper-sized $12.5 billion. According to the National Post, the combined annual sales of Burger King and Tim Hortons is over $23 billion (US$) with over 18,000 locations worldwide.
Tim’s fans, used to lining up for their double-double every day, may be wondering how this change will affect their coffee tradition? Will, for instance, they be able to purchase their favourite Tim’s coffee at Burger King locations? And, what will happen to those Wendy’s outlets conveniently co-located with a Tim’s franchise? Will The Burger King soon appear side-by-side with Tim Hortons, displacing the smiling, red-haired Wendy?
Meanwhile, the Financial Post reports that Burger King’s worldwide influence is good news for the Tim Hortons brand. The Post reports that Miles Nadal, from the major advertising firm MDC Partners Inc, believes that the combination of 3G Capital’s strong marketing orientation and Burger King’s large international presence, will help advance Tim Hortons as a worldwide brand. Of course, with branding, some Tim Hortons patrons may be fearing a change to the coffee chain they love. A Canadian Press story last week featured CusotmerLAB CEO, Jim Dahany, noting his concerns that this new business combination may raise concerns around the old rule of ‘if it ain’t broke, don’t fix it’.
1) What do you think were the main reasons why Burger King and 3G Capital decided to purchase Tim Hortons?
2) As an accounting student, what do you think will be some of the major accounting issues that will emerge from this business combination?
3) What concerns would you have around the rule ‘if it ain’t broke, don’t fix it’? In other words, what is it about Tim Hortons that you would say “Leave it alone. I don’t want to see it change”?
Is celebrating the 50th anniversary of the opening of its first location, and today the coffee and doughnut giant created a temporary replica of Store No. 1 and plopped it into a busy city square.
The installation, staffed on Thursday with servers dressed in Mad Men-era uniforms handing out goodies to passersby, wasn’t unveiled in Hamilton, the real home of Tim Hortons’ first site.
Instead, the corporation rolled out the blast from Canada’s past in downtown Toronto’s Yonge-Dundas Square.
First Tim Hortons restaurant
Opened in Hamilton on May 17, 1964, inside a converted car repair garage on Ottawa Street North at Dunsmure, The restaurant took its name from founder Tim Horton, who just weeks before launching the business won the Stanley Cup with the Toronto Maple Leafs.
50 years of growth
Over the past 50 years, Tim Hortons has grown from its Hamilton beginnings to become the dominant coffee and baked goods chain in Canada, with more than 4,000 locations, as well as approximately 800 in the U.S. and more than two dozen in the Middle East.
Tim Hortons said it will continue to celebrate the anniversary by offering a free “birthday cake” doughnut at participating locations across Canada.
“Guests can also look forward to the release of a commemorative online video, which will capture the hearts of Tim Hortons fans who have grown up drinking Canada’s favourite coffee,” the restaurant chain said in a statement.
The original Ottawa Street location stills exists, but looks nothing like it did in 1964.
1. Do you see a continued growth for Tim Horton?
2. Was Tim Horton successful in the United States? Research the internet.
3. Why do you like Tim Hortons’ coffee? What is your favourite coffee shop?
Canada’s economy shed 29,000 jobs in April but the employment rate stayed flat at 6.9 per cent.Fewer people looking for work caused the jobless rate to stay the same, Statistics Canada said Friday.
Economists had anticipated an increase of 12,000 jobs for April, according to Thomson Reuters. “There has been little overall employment growth in Canada since August 2013,” the data agency said in a release Friday.
For comparison purposes, the U.S. jobless rate dropped from 6.6 per cent to 6.3 per cent in May — but Statistics Canada says Canada and the U.S. count their data in different ways, and if Canada’s numbers are calculated the way the U.S. calculates them, then Canada’s rate drops to six per cent. Large drop in Quebec
The lion’s share of the losses came from full-time jobs, which shrank by 30,900 positions. Those losses were partially offset by an increase in 2,000 part-time jobs. Private- and public-sector jobs both lost ground, but there was a small uptick in self-employment. The poor showing comes on the heels of strong gains in March, when the economy cranked out almost 43,000 new jobs.
The details were a mess,” Scotiabank economist Derek Holt said in a note. “It was an ugly jobs number.” The numbers differed across the country, as Saskatchewan, Nova Scotia and Ontario posted job gains, while the numbers decreased in every other province. Ontario and Quebec were opposites, with Quebec losing a whopping 32,000 jobs, while Ontario gained almost 26,000.
1. In your field of study, have you checked the job opportunities?
2 Are you planning to re-locate to to find a better job or opportunities?
3. Do you have an idea, what you will be earning when you graduate?