Sunday News Roundup 22.06.12: American rules, Russian sanctions, and more Canadian accounting news
Wrapping up the odds and ends from the past week in Canadian accounting news
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TORONTO, June 12, 2022 – Canadian corporations are likely facing a higher level of climate-related financial disclosure than they may have expected. In just five days, the US Securities and Exchange Commission will close the comment period for a proposed rule, The Enhancement and Standardization of Climate-Related Disclosures for Investors. If the rule is approved, about 200 Canadian issuers that access US stock and bond markets will be required to comply with the new standard, according to BNN Bloomberg.
It may comes as a surprise to the public that the proposed US standards are actually tougher than similar standards proposed by the national umbrella group of securities regulators: Canadian Securities Administrators (CSA). But, according to this lengthy analysis by Osler, Hoskin & Harcourt LLP, “the Proposed Rule was issued after the CSA issued draft National Instrument 51-107 and before [the International Sustainainability Standards Board] issued its exposure draft on Climate-Related Disclosures.
Jeffrey Jones in the Globe and Mail signaled the issue back a few weeks ago, when he pointed out the “softer approach” of the CSA rules. While this may be embarrassing for Canada, the US rules may never come to pass (at least in their current form), as Bloomberg reports that Wall Street’s Lawyers Attack SEC Effort to Crush Greenwashing. What a headache for the Canadian accountants working in corporate finance at Canada’s largest corporations.
And now, on to the rest of the news from the past week in Canadian accounting.
Russian sanctions rope in Canadian accountants
This past Tuesday, Foreign Affairs announced another round of sanctions against Russia, this time outlawing seven kinds of industries and 28 kinds of Canadian services, including “accounting, auditing and bookkeeping.” CPA Canada has already warned its members to “watch out for sanctions evasion,” which at the time was largely focused on money laundering.
Both the US and Britain implemented similar sanctions way back in May, although British firms lobbied for exemptions later that month, arguing that sanctions would stop them from meeting their professional obligations. As we reported back in March, the Big Four accounting firms have long provided lucrative services to Russian industries and oligarchs.
Big Four splitting up its businesses … or not
On Wednesday, the Wall Street Journal reported that Deloitte is playing follow the leader and looking into splitting up its audit and advisory businesses, similar to the effort by Ernst & Young. Then Bloomberg Tax reported that Deloitte was denying the report, calling it “categorically untrue.”
It was Bloomberg that had the most pointed take on EY’s proposed plan: Accounting ethics watchdogs are biting into the potential profits of the Big Four by hindering their lucrative consulting work. Consider the rather lengthy lecture posted by Paul Munter, Acting Chief Accountant at the US Securities and Exchange Commission, this past Thursday. A rather extraordinary warning, complete with footnotes (because Munter is, after all, an accountant), that “auditor independence is grounded in an understanding of accounting as a profession rather than an industry.”
Bill Morneau gets back into political life
The former federal finance minister was back in the news this past week to stick a knife into the back of the Liberal government. In a speech Wednesday evening to the C.D. Howe Institute, Morneau decried “our lack of competitiveness” and wants government to focus on “long-term solutions.” The CBC called it The ballad of Bill Morneau — a call for more economic growth, less politics, but the Financial Post was having none of it, calling Morneau the “polite economic arsonist,” whose “policies led to the inflation we are facing today.”
Morneau kept Canadian Accountant very busy during his days in office. From his ill-fated tax proposals to the scandals over his own business and personal tax planning, Morneau was despised by Canadian accountants, even though he seemed like the perfect client. It’s easy to forget now that the final nail in the coffin for Morneau was not his tax policies but his involvement with the We Charity.
Corporate Overlords Try to Scare Us Back Into the Office With Figures on How Much WFH is Costing You (Going Concern)
Tax & Spend: It’s time to stop talking about productivity (Globe and Mail)
Canada cancels ultra-long bond sale as tax revenue pours in (Bloomberg)
Tax evasion charges dropped against former Calgary MP Rob Anders on Day 1 of trial (CBC)
Federal oil and gas windfall tax would be 'extreme act of aggression,' Alberta's energy minister warns (CBC)
By Canadian Accountant staff.