Sunday News Roundup 21.10.31: PwC vs KPMG, carbon loopholes, low-interest gravy trains and more
Wrapping up the odds and ends in this week’s Canadian accounting news
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TORONTO, Oct. 31, 2021 – The biggest business story of the past week was undoubtedly the family feud playing out at Rogers Communications, a Succession drama with the late Ted Rogers as Logan Roy, which almost obscured the saga of Bridging Finance and the strange sight of PwC Canada calling out KPMG. If you’re a critic of audit transparency in Canada, a Big Four family feud could be far more interesting than the messy business currently occurring at Rogers.
On Thursday, the Globe and Mail reported Bridging Finance’s receiver eyes lawsuit against KPMG, the private lender’s auditor, and was “analyzing and assessing claims … against various parties, including KPMG.” And who is the Bridging Finance receiver, appointed by the Ontario Securities Commission? That would be KPMG’s big brother, PricewaterhouseCoopers LLP. BNN Bloomberg has done some excellent reporting on the scandal. Suffice it to say that the company allegedly moved money offshore to Liechtenstein.
KPMG resigned as the company’s auditor on October 13: “Prior to KPMG’s resignation, we had advised it of concerns regarding the financial statements of the Bridging funds that had been audited by KPMG.” And now, on to the rest of the odds and ends in news from the wonderful world of Canadian accounting.
Global corporate tax deal formalized
The G20 finance ministers got together last weekend to pose for some pictures and officially endorse the new minimum global corporate tax. But praise from some parties is muted, saying the 15 per cent figure is little more than a “fiscal paradise” for corporations, and the Biden Administration is looking increasingly feeble in its capacity to push forward legislation.
Sustainable business guidance for CFOs and finance teams
CPA Canada, which has been very active on the climate change and sustainability file, promoted the publication this past week of the Essential Guide to Engaging the Board and Executive Management. The release comes in the run-up to the COP26 meeting in Glasgow.
“With detailed guidance, step-by-step checklists and case studies, this guide illustrates how finance teams can use regular board activities to embed social and environmental risk and opportunity into strategy and decision making.”
A group of international CFOs developed the guide as part of the Canadian Chapter of the A4S CFO Leadership Network, with practical examples such as British Land, Brookfield, Manulife, TELUS, Watercare and Yorkshire Water, “all demonstrating how fostering board and executive engagement has helped reshape and increase sustainability within their organizations.”
Carbon loopholes in Canadian forestry accounting
Here’s a big story indirectly related to sustainability and accounting. When it comes to Canadian logging interests, Peter Drucker’s old axiom “What gets measured gets managed,” should be changed to “What gets measured goes missing.” According to The Narwhal, and later reported by the CBC, “New research finds that by overcounting the carbon storage of intact forests and undercounting emissions from logging, the Government of Canada is vastly underreporting the climate impacts of clearcutting in one of the country’s greatest carbon sinks.” In short, Canada is vastly underestimating carbon emissions from forestry sector, making us no better than Brazil when it comes old-growth logging.
Low-interest gravy train coming to end
“Canadians know that the low-interest gravy train must end at some point,” said the latest MNP Consumer Debt Index this past week, “as a majority (52%) are concerned about the impact of rising interest rates on their financial situation (up two points since last quarter), and this has Canadians increasingly cautious or worried.”
Canadian workers feeling burned out, employers aren’t listening
A new study this week by Sage Canada found that 56 per cent of businesses are now concerned about their employees burning out, and that 40 per cent of employees are concerned about burning out themselves. Both numbers have gone up since the company released a similar study in April, which found that 42 per cent of Canadian businesses feared burnout would have a negative impact on their 2021 revenue and that 32 percent of Canadian workers feared burnout would affect their ability to effectively do their jobs.
Despite this fear on both sides, the study found that 60 per cent of businesses have taken no action for mitigating burnout among workers. Most that have are investing in mental health knowledge resources, rather than the increase in self-care benefits and self-care days that their employees say would make a real difference.
Canadian accounting board calls for more disclosures on tax and accounting differences (MNE Tax)
As Ottawa aims for 2030 carbon goals, net benefits for households shrink (Globe and Mail)
Overseas tax evasion, money laundering and increased housing prices in Canada (The Standard)
Canada's Preferential Tax Treatment For United Nations Employees: Tax Deduction For UN Employment Income (Mondaq)
The CRB has ended. Here’s how it may impact Canadians’ taxes (Global)
By Canadian Accountant staff.