Friday News Roundup 21.06.04: Sustainability standards, Isle of Man, PwC diversity and more 

Update: June 6, 2021.

TORONTO, June 4, 2021 – There were two significant late-breaking stories from the global accounting world that are well worth mentioning, among the odds and ends from the world of Canadian accounting news. The first was the announcement that the U.S. Securities and Exchange Commission (SEC) fired William Duhnke III, the chair of the "toothless" Public Company Accounting Oversight Board (PCAOB), late Friday. The SEC also served notice that it planned to replace the members appointed by the Trump administration.

There's a lot to parse here. Bloomberg opines that "Duhnke’s critics argued that he had mismanaged the regulator and was too friendly to accounting firms." While Politico says that Gary Gensler, the Head of the SEC, was in the crosshairs of Elizabeth Warren and Bernie Sanders, for failing to quickly clean house. Gensler's own political future in the well-paid position was in jeopardy.

The second major story came early Saturday morning. With European Union and Commonwealth countries such as Canada pursuing digital services taxes against tech giants, the G7 signed a deal agreeing to a proposal from US President Joe Biden to adopt a global minimum corporate tax rate. A global deal, if adopted by the G20, will be a big headache (and a billings boon) for tax accountants and lawyers who specialize in transfer pricing. Tax havens such as Ireland are understandably worried about their economies. We'll see if the deal gets signed.

CPA Canada calls for support of International Sustainability Standards Board

Earlier this week, CPA Canada issued a press release, urging a “united effort domestically to support international sustainability standards board.” CPA Canada is encouraging leaders from the country's private and public sectors to weigh in on important steps toward establishing a new international sustainability standards board. 

Why now? Because a decision on a new ISSB is expected at the United Nations Climate Conference, COP26, in November 2021. If you’re confused about the alphabet soup of sustainability standards, the Financial Times in the UK had a good feature article on the subject last month: “Measuring what matters: the scramble to set standards for sustainable business - Support is growing for common ESG metrics, but their final form has yet to be thrashed out.” 

KPMG and the Isle of Man: What is the CBC trying to prove?

There was another skirmish this week in the ongoing battle between the CBC and KPMG. The public broadcaster published a news report today that focused on one wealthy family, the Coopers, who emigrated from South Africa to Canada. Tax planning for wealthy Canadian immigrants is part of the accounting and legal landscape and a popular topic on Canadian Accountant. 

It appears that the CBC is trying to cast doubt on KPMG’s assertion that the Isle of Man scheme ended in 2003. A KPMG spokesperson said during recent hearings that CBC/Radio-Canada was sent a notice of libel after alleging a connection between a Montreal fraud scheme and KPMG. It was that reporting (by The Fifth Estate) that resurrected the current finance committee hearings into offshore tax evasion. 

Give more funding to the CRA, says Israeli professor

Amir Barnea, an associate professor of finance at HEC Montréal, wrote an Op-ed this week calling for more funding of the Canada Revenue Agency. Barnea compares Joe Biden’s plans to increase funding to the IRS with the current state of funding for the CRA. 

Of course, the Trudeau government’s increase of funding to the CRA was anathema to some Canadian tax accountants, who were quite happy with the levels of funding during the Harper government. Buried in Barnea’s article is this stunner of a statement: “Coming from Israel, where tax authorities are viewed as pure evil and trying to trick them is a national sport …” 

Speaking of Biden, the Financial Post reports that the current US president wants to close the 1031 like-kind exchange rule, which helped the former US president build his real estate fortune. Back in 2015, Kenneth Keung of Moodys Tax wrote a blog post on the discrepancies between 1031 and Section 44 of the Income Tax Act. 

PwC Canada adds diversity to board

The Big Four accounting firm announced four external directors to its board this week. The four new directors — Ian Austin, Bev Briscoe, Scott Patles-Richardson and Razor Suleman — are capable businesspersons and also reflect a new level of diversity for PwC. 

Closing the books with Sage

Earlier in the week, Sage shared the results from its annual Close the Books Survey, which looks at the challenges and opportunities for finance and accounting professionals during the financial close process. Sixty per cent of respondents said the close process takes over a week, delaying access to reliable information vital to business direction. 

The survey found the top obstacles impacting the close process were data manipulation in spreadsheets and data imports/exports. These manual tasks have a significant impact on the time to close – slowing the process and leading to businesses making decisions based on stale information. In fact, those businesses most impacted by spreadsheet manipulation have a close process that is 36% longer than those only slightly impacted. 

Quick Hits

Shopify adds to list of strategic deals with investment in Vancouver’s Bench Accounting 

By Canadian Accountant staff.