Who’s the boss?

Posted by & filed under Accounting Theory, Advanced Accounting.

Description: Doug McGregor, head of RBC’s capital markets operation, earned $13.25 million in 2014. That’s a pretty fair payday, no doubt. But one of the surprising things about it is that it outstripped the pay of his boss, RBC CEO Dave McKay. According to proxy circulars, at the other Canadian banks pay for their heads of capital markets topped out at about $8 million.

Source: Globe and Mail.com

Date:  March 19, 2015

Link: http://www.theglobeandmail.com/report-on-business/streetwise/rbcs-capital-markets-head-scores-major-payday/article23469683/

Discussion Points:

1) Why do you think Mr. McGregor’s pay was higher than that of his CEO? What might accounting theory suggest about this?

2) Why do you think Mr. McGregor’s pay was so much higher than his peers at the other Canadian banks?

3) How will the RBC have to account for Mr. McGregor’s deferred compensation?

The bothy

Posted by & filed under Public Finance, Student life.

Description: How would you like to live in a bothy for a while during your university term? A bothy is a Scottish word for a small cabin, and the government is funding a series of these bothys in rural Scotland as a form of artist retreat. One designer, Gareth Neal, will soon install a bothy in a London gallery, and during its time there, he will stock the bothy with his ten “essential” possessions. Of course, simplifying life can create business opportunities, as some designers are finding out.

Source: Globe and Mail.com

Date:  March 18, 2015; updated March 19, 2015

Link: http://www.theglobeandmail.com/life/home-and-garden/decor/the-bare-essentials/article23517221/#content

Discussion Points:

1) Which ten essential objects would you select if you were to spend time in a bothy?

2) Would you trade your university accommodations for a bothy?

3) In the article it discusses government funding of bothys for the artist community in Scotland. What do you see as some of the costs and benefits of such a government policy?

More on the Target exit

Posted by & filed under Accounting Principles, Advanced Accounting, Ethics.

Description: Documents requested by Target Canada’s suppliers indicate that the retailer began considering winding down in Canada early last fall. Target contacted its Canadian law firm in September to look at various “strategic options.” Target’s suppliers are upset as they believe that Target should have begun reducing orders of inventory – rather than increasing them –  given its knowledge that a pull-out from Canada could be coming. Target maintains it did not direct any employee to increase inventory in anticipation of bankruptcy proceedings.

Source: Globe and Mail.com

Date:  March 16, 2015; updated March 17, 2015

Link: http://www.theglobeandmail.com/report-on-business/target-canada-considered-winding-down-operations-as-early-as-october/article23485627/

Discussion Points:

1) What recourse do suppliers who have sold inventory to Target have?

2) If you were an accountant of a supplier of Target, what actions might you have to take in terms of presenting accounts receivable on the financial statements?

3) What are some of the relevant ethical issues that could be discussed in this situation?

Taxes and democracy

Posted by & filed under Canadian Economy, Student life, Taxation.

Description: A new film, The Price We Pay, is bringing to us the European debate about how to handle huge companies that use tax havens to shift billions in profits offshore. Companies like Starbucks and Amazon have already seen pressure on this issue. The  film questions whether some of the tax havens may have received a big boost from Canadian banks in the 1960s.

Source: Globe and Mail.com

Date:  March 11, 2015

Link: http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/canadian-documentary-warns-tax-havens-threaten-democracy/article23409274/

Discussion Points:

1) As a student and a consumer, how do you feel about the tax policy of these companies?

2) What can  governments do to address this issue?

3) Do you think you will want to watch this film?

Selling off Hydro One

Posted by & filed under Advanced Accounting, Canadian Economy, Public Finance.

Description: Premier Kathleen Wynne has now joined the list of three previous Ontario premiers who have proposed selling of Hydro One, the provincially owned electric utility. With a probable value in excess of $15 billion, Hydro One may be an attractive target for privatization. The Premier sees the funds generated from sale of this Crown corporation as a source for supporting a number of infrastructure projects she has proposed.

Source: Globe and Mail.com

Date:  March 13, 2015

Link:  http://www.theglobeandmail.com/report-on-business/wynnes-quest-for-full-valuethe-long-road-to-privatization/article23461789/?ord=1

Discussion Points:

1) What do you think about this proposed initiative as a way to fund infrastructure projects?

2) As the Province of Ontario sells off portions of Ontario Hydro, what changes would you expect to see in its financial statements?

3) There is some discussion that the initial public offering will be for about 10-15% of Hydro One. Do you think this is enough of a stake to attract the right investors?

Canadian CFO leaving Google

Posted by & filed under Accounting Careers.

Description: Canadian Patrick Pichette, Google’s CFO since 2008, announced his retirement from the huge company last week. At only 52, this can be considered an early retirement and he intends to do more traveling. The decision was spurred by a question his wife asked him as they stood on top of Mount Kilimanjaro last fall.

Source: Globe and Mail.com

Date:  March 11, 2015, updated March 13, 2015

Link:  http://www.theglobeandmail.com/technology/googles-canadian-cfo-ready-to-embark-on-an-early-retirement/article23412646/

Discussion Points:

1) What do  you think of Mr. Pichette’s decsion to retire at 52?

2) As your university career winds down, and you think ahead to your future, what is your career plan?

3) What lessons do you see for your own life in Mr. Pichette’s career?

Mega-rich like Toronto

Posted by & filed under Accounting Careers, Canadian Economy, Taxation.

Description: According to a  report released on March 5 by real estate  consultants  Knight Frank, Toronto ranks among key cities for the Mega-rich. Those with lots of money apparently see much that is attractive in Canada’s most populous city. Meanwhile, Sotheby’s International Realty Canada suggests that Toronto will continue to lead the luxury real estate market in Canada.

Source: Globe and Mail.com

Date:  March 5, 2015

Link:  http://www.theglobeandmail.com/report-on-business/top-business-stories/toronto-among-cities-that-will-dominate-for-worlds-megarich-study-finds/article23304004/

Discussion Points:

1) What business opportunities do you think might emerge for the accounting profession from this situation?

2) For Canadian governments at various levels, does this situation present any opportunities or challenges?

3) Why do you think Toronto is looked upon so favorably by wealthy individuals?

Job quality heading south

Posted by & filed under Accounting Careers, Canadian Economy.

Description: More Canadians are becoming self-employed. And wages of those employed seem to be falling. A study by the Canadian Imperial Bank of Commerce shows rather alarming trends in measures of job quality, looking at data from a 25 year span.

Source: Globe and Mail.com

Date:  March 5, 2015

Link:  http://www.theglobeandmail.com/report-on-business/economy/job-quality-in-canada-sinks-to-all-time-low-cibc-index-shows/article23303996/

Discussion Points:

1) How do you feel about the employment prospects for you and your fellow classmates?

2) What are some things that you might do to prepare for the job market in the face of such trends?

3) What are some of the policy options that Canada might pursue to reverse these trends in job quality?

Costco beats Walmart

Posted by & filed under Accounting Theory, Corporate Strategy.

Description: Costco – the huge warehouse style retailer – beat Walmart and Target in sales growth in the most recent quarter. Costco was up over 8% versus about 1.5% for Walmart and 3.2% for Target. Perhaps in a bit of a surprise though, Costco shares fell about 0.1%.

Source: Globe and Mail.com

Date:  March 5, 2015

Link:  http://www.theglobeandmail.com/report-on-business/international-business/us-business/costco-profit-tops-estimates-as-revenue-growth-beats-wal-mart/article23303696/

Discussion Points:

1) What do you think may be some of the reasons behind Costco’s success?

2) What are some internal control considerations for a giant retailer like Costco?

3) Why would Costco’s shares have fallen in the face of this positive news? What might accounting theory have to say about this?

Not ready for hackers

Posted by & filed under Accounting Careers, Auditing.

Description: A report released on Tuesday, February 24, by security firm FireEye showed that roughly 70 percent of companies suffering data breaches last year found out about it from someone outside the organization. Police agencies and customers, for example, may notify a company before anyone inside the organization realizes they have been hit by cyberattack. Another scary fact revealed in the report is that the median time to find out about an attack was about 7 months, leaving lots of time for the hackers and attackers to wander around at will.

Source: Globe and Mail.com

Date:  February 24, 2015

Link:  http://www.theglobeandmail.com/technology/companies-are-falling-short-in-efforts-to-counter-cyberattacks-report/article23190827/

Discussion Points:

1) Have you ever had your data compromised in a cyberattack?

2) What are some internal controls that you may have learned in your auditing or accounting classes that could help prevent or detect cyberattacks?

3) What are some of the career options for accountants who are interested in developing a career in cyber security?