Sunday News Roundup 23.01.15: CRA tax strike, time theft, sales tax fraud, and more Canadian accounting news
Wrapping up the odds and ends from the past week in Canadian accounting news
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TORONTO, Jan. 15, 2023 – Just in time for tax season, workers at the Canada Revenue Agency say they are “fed up” with working conditions, and will soon vote to strike. The main issue is that they have been working without a contract for more than a year. Another issue is remote work. The government wants to mandate everyone back to in-person work but the union says the government does not have the space to bring back 9,000 workers.
Apparently some workers work remotely and some in-house. “We have 9,000 call centre employees, they have a headset and laptop, and they’re sitting at home,” the union head told the Daily Hive. “The CRA doesn’t have the space to have all these people because we grew a lot… We can’t even bring them back to the office.”
That might explain some of the bottlenecks in customer service. The vote won’t happen until April and the tax deadline is April 30, 2023. The kickoff to tax season is February 20, 2023. And now, on to the rest of the news from the past week in Canadian accounting.
BC accounting time theft story goes viral
It is a rare occasion when a Canadian accounting story goes viral. But this week, a wrongful dismissal case in B.C. involving “spy software” and “time theft” was reported by everyone from The Guardian to NPR. As usual, mainstream media outlets reported the crux of the story but missed some of the finer accounting details. For those, you will have to read our own take on the story, WFH Accountants Beware: BC tracking software case leads to global news coverage.
Canadian finance professor clocks corporate fraud
Just How Common Is Corporate Fraud? asked the New York Times this past week. Alexander Dyck, a finance professor at the University of Toronto, has provided the answer. According to the Times, Dyck’s study on the pervasiveness of corporate fraud “has been passed around in the world of academia in recent weeks, and has become a fascination among general counsels, corporate leaders and investors.”
While the professor estimates that about 40 per cent of companies are committing accounting violations, the use of the word “fraud” in the study is “highly problematic,” says a former SEC commissioner. Joseph Grundfest, a former SEC Commissioner appointed by Ronald Reagan, asserts “events they call fraudulent include alleged frauds that weren’t frauds, honest mistakes and differences of opinion about accounting treatment.”
Ernst and Young building a war chest to fund future post-split
The Financial Times reported this past week that EY Global will spend big bucks on branding ($400 million) its new consulting business and buying up consulting companies ($2.5 billion) after it splits. It’s an interesting story, as it hints that the Big Four firm will take another run at acquiring law firms (which never really worked out in the past), and that almost all the partners globally have now been assigned to either the new consulting firm or the legacy EY business.
EY Global looks to be moving ahead quickly. This past week it announced Jamie Miller as global chief financial officer of the soon-to-be-spun-off consulting business, after previously announcing Julie Boland as the Global Chair and CEO of the auditing part of EY.
OECD Pillar Two deal pushes proposed temporary relief from deferred tax accounting
The news that the European Union had approved the Global Minimum Tax deal of 15 per cent came as something of a surprise, perhaps even to the International Accounting Standards Board (IASB). The IASB issued proposed amendments this past week to IAS 12 Income Taxes. Bloomberg Tax positioned this as Accounting Rulemaker Rushes Tax Changes to Avert OECD Problems.
The exposure draft is open for comment until March 10, 2023. The proposed amendments would introduce: a temporary exception to the accounting for deferred taxes arising from the implementation of the rules; and targeted disclosure requirements for affected companies.
Munter gets the job – Expect more of the same from the PCAOB
Just two weeks after SEC Commissioner Hester Peirce (a Trump appointee) complained that the PCAOB budget was getting too big, the SEC has raised its middle finger by appointing Acting Chief Accountant Paul Munter to the permanent position. Munter had served in the interim role for two years before getting the job.
Bloomberg Tax captured it perfectly: “Despite acting in an interim capacity, Munter has been a consequential overseer of corporate accounting and auditing, opining on the professionalism of auditors, backing quicker updates to US accounting standards, and engaging with international regulators on sustainability reporting standards.” Take that, detractors.
Burlington sales tax fraudster sentenced to jail
A Burlington, Ontario man was sentenced this past week to 36 months in jail for fraud for making false statements on a whopping 169 GST/HST returns for his four sole proprietor accounts. In total, the fellow obtained or attempted to obtain $825,790 in GST/HST refunds to which they were not entitled. Apparently the man’s company provided transportation services to various companies in Ontario.
Quick Hits: Articles of Interest
The CRA is cracking down on COVID-19 benefit payments as this taxpayer found out (Financial Post)
Inflation, pandemic costs driving property tax hikes in Ontario (Canadian Press)
Ontario now has a carbon tax on industry. What will Doug Ford's government do with the revenue? (CBC)
RSM Canada promotes 11 to partner (Consulting.ca)
BDO merges with FL Fuller Landau LLP in Québec (News Release)
This practical new spin on a savings account might just peel you away from your big bank (Globe and Mail)
Market watchers have little faith anti-flipping tax, foreign buyers ban will improve housing affordability in Canada (Globe and Mail)
The final tax return after death: How it gets done in Canada (Moneysense)
CEO uses 'coffee cup test' in every job interview to help determine who gets the jobs (Wales Online)
Brazil's Americanas could face up to $8 billion early debt charges after accounting scandal, court warns (Reuters)
UK regulator finds no ‘systemic’ exam cheating issues (accountantsdaily)
By Canadian Accountant staff.