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Sunday News Roundup 23.10.22: The Big Rift, return of the Roundup, and more Canadian accounting news

Wrapping up the odds and ends from the past week in Canadian accounting news

Author: Canadian Accountant

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TORONTO, Oct. 22, 2023 – This past week, we concluded our five-part series, CPA Standoff, on the rift between CPA Canada and the two largest provincial bodies, Ontario and Quebec, over renewing the Collaboration Accord. But we’re not the only media outlet covering the standoff. 

The Globe and Mail focused on opposition from past national chairs while the Canadian Press focused on opposition from members. What is lacking from the coverage are the real concerns of the provinces and the anger some members feel about the annual fees they must pay to CPA Canada. Jean Desgagné’s editorial in the Globe gets a little closer to these issues. It appears that Ontario specifically does not trust CPA Canada and this distrust has run through the administrations of both Joy Thomas and Charles-Antoine St-Jean. 

Kevin Dancey’s editorial was massively entertaining. The former head of CPA Canada could have been a standup comic — we kept waiting for “what’s the deal with … CPA Ontario?” — and he was right to criticize the provinces for their lack of specifics. On the other hand, his willingness to confine CPA Ontario to the role of regulator, while CPA Canada gets all the goodies, ignores the power that the legacy provincial bodies once wielded. 

We’ll have more on the rift in the coming days. While our five-part series won praise from many quarters, we feel that we have barely scratched the surface. And now, on to the rest of the news from the past week in Canadian accounting. 

CPA Ontario hits paydirt with accounting settlement

Speaking of financial transparency, we couldn’t help but comment on CPA Ontario’s $1.2 million settlement with Marcum LLP, which is based in the United States. Back in March 2023, we were scratching our heads at the news that the Canadian Public Accountability Board had issued a rare enforcement action ... against an American accounting firm? 

The news was just plain weird on so many levels. Firstly, it was the first time that CPAB, under new transparency rules, had disclosed the subject of an enforcement action. Since then, the audit watchdog has levelled a slew of enforcement actions, mostly on BC accounting firms. But still, we couldn’t help but ask, why an American firm as your first choice to make a statement? 

It is an unusual and rare censure by CPAB. Unusual because the limited information provided may lead some to speculate that the accounting firm was not using Canadian audit standards at all in the engagements inspected by CPAB. Rare because CPAB has averaged just one public censure per year in the last two years.  

Turns out we were pretty much spot on, as the press release from CPA Ontario explains, but CPAB did not disclose: “The settlement resolves allegations of multiple instances of partners at US-based Marcum LLP engaging in public accounting work in Ontario, including performing audits of reporting issuers, without being members of CPA Ontario or holding Public Accounting Licenses in Ontario.”

Mystery solved. And it only took six months.

The settlement money will go to the Ontario government, not CPA Ontario, unfortunately. And we have one quibble with CPA Ontario. Could you please use the Canadian spelling of “practise” as a verb? The clause “if they wish to practice [sic] in the province” would make more sense if you were using Canadian Press style. 

Hey, CPAs. Don’t record your office conversations

Ever wonder what happened to the CPA who secretly recorded his office conversations? Well, he lost his case before the BC Court of Appeal, according to a human resources magazine. The financial analyst recorded scores of conversations at a time when he was unhappy with his compensation. The employee was dismissed and later took his employer to court. 

The case is somewhat reminiscent of the infamous “time theft case,” also involving a BC accountant, who also took their employer to court (and lost) over wrongful dismissal. In the recordings case, the BC Court of Appeal took a dim view of the accountant’s behaviour, saying “the recording activity was underhanded,” whereas the employee claimed the recordings were to improve his English. 

Warrior accountants and the green economy

Speaking of bad language, is there anything worse than the phrase “warrior accountants,” which has been co-opted by the political right, in much the same manner as the term “woke”? There was a time when “warrior accountants” was all the rage in fashionable accounting circles (if such a thing exists). Now it’s a derogatory putdown from the likes of Tammy Nemeth in the Financial Post. 

Nemeth, whom the CBC labelled a “home-school teacher in England,” believes that grocery stores will pass on the cost of sustainability reporting to consumers. She may be right, (although who would know, given the use of IFRS?), but multiple reports have shown that sustainability standards are years away. So the fears over sustainability standards hardly seem justified, and even ludicrous, when the CSSB, which recently finalized its appointments, has so many oil and gas investors on its board of directors. 

And all this when Canadians for Tax Fairness recently published a report on all the ways that our tax system is working against Canada’s climate and equality goals. 

Maybe the Liberals’ digital tax is a good thing after all …

And, in late-breaking news, the Canadian Press is reporting that the OECD’s global minimum tax deal is so full of loopholes, according to “a tax watchdog backed by the European Union,” it looks like Swiss cheese. Don’t forget: The Biden Administration has been bugging Chrystia Freeland over the Liberals’ digital tax plans, which Freeland said she would abandon if the global deal goes through. 

Well, if the EU Tax Observatory is to believed, Freeland was right all along to hold fast on a digital tax on revenue earned by multinational technology companies in Canada. The countries that abandoned their own digital tax plans look like the ones in the wrong. 

The return of the Roundup

Finally, if you’re a regular reader of Canadian Accountant, you may have wondered what happened to our Sunday News Roundup. We haven’t published one in exactly two months. Frankly, with the limited resources at our disposal, the Roundups were taking away from our regular reporting. We know that many CPAs, even if they don’t agree with our opinions, are fans of the Roundup, so we’re looking at ways to re-brand and continue their publication. 

We’ve added a few stories more than a week old to the articles of interest below. They were too good not to let you know. 

Quick Hits: Articles of Interest 

Opinion: Charities are struggling and Ottawa wants to tax donations more (Financial Post)
From living in his car to time behind bars: Halifax accountant jailed over $1.5-million fraud (Saltwire)
Fraudster pleads guilty to embezzling $1M while taking 13 first-class cruises in 4 years (CBC)
Xero Awards Canada 2023 (Xero website) 

Why No One’s Going Into Accounting (Wall Street Journal)
Self-sacrifice or empty symbolism: A study of $1 CEOs (Accounting & Finance) 

By Canadian Accountant staff.

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