Sunday News Roundup 24.07.21: Biden drops out, how accountants vote, and more Canadian accounting news

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

Jul 22, 2024 Author: Canadian Accountant

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TORONTO, July 21, 2024 – Earlier today, US President Joe Biden announced that he is stepping aside as the presumptive Democratic nominee for the 2024 presidential contest, and endorsing Vice President Kamala Harris to be the party's nominee. As numerous Canadian pundits have pointed out, the results of the November election are sure to have a profound impact on the Canadian economy, and may even affect voting preferences in the next federal election in Canada.

So now is a good time to look at the voting preferences of accountants on both sides of the border.

In 2020, according to the American platform Accounting Today, 55% of accountants intended to vote for Donald Trump, compared to 38% who would vote for Joe Biden. “That a majority of accountants should plan to vote for President Trump is no surprise — they favored him by even larger margins in 2016, and the profession has leaned heavily Republican in previous presidential elections.”

In April of this year, Accounting Today released the results of new polling, showing a virtually even split in party preferences, albeit with a large number of undecided voters. (Unlike in 2020, Accounting Today did not frame the question in terms of presidential nominees but rather in terms of party preferences.) American accountants also shared a general distrust of election integrity and a clear belief that Republican victories would be best for their firms and the accounting profession as a whole.

“Things are pretty much neck and neck when it comes to accountants with declared preferences in the presidential race — but almost a third of those polled are still up in the air, split evenly between those who prefer not to answer and those who are undecided.” Despite a clear preference for Donald Trump in 2020, however, more survey respondents in 2024 claimed they voted for Joe Biden in the last presidential election. (Accounting Today did not explain the anomaly.)

“Regardless of their individual choice for this year's specific presidential candidates, the profession shows a marked preference for Republican leadership in the Oval Office and Congress.” This preference mirrors a similar pattern in Canada. In our own election polling, Canadian accountants tend to vote Conservative, even when it places the profession at odds with the public.

As we approach our next federal election in Canada, we will share our polling results on party and leadership preferences. Early indications suggest that the Canadian public may have caught up with the preferences of the profession. And now, on to the rest of the news from the past week in Canadian accounting.

PwC brand struggling with bad press

There’s been a steady drumbeat of bad press for PricewaterhouseCoopers this month. For example, in the great gold rush of companies (including professional services firms) into China, how many executives considered the potential downside of state-run capitalism? According to Bloomberg Law and others, PwC appears to be persona non grata in China after its botched auditing of property developer Evergrande.

Meanwhile in Australia, the fallout from the PwC tax leaks scandal continues, with the accounting profession teaming up to attack new professional and ethical conduct rules, according to the Financial Review. The profession says the new rules are “poorly drafted” and will hurt small practitioners most. The government shows no interest as of yet in a compromise.

And in the UK, where PwC has had a “challenging year,” the firm has warned its 26,000 staff of lower bonuses, smaller salary increases, and no half-day Fridays, according to the Financial Times. No word on whether the same holds true in Canada, where PwC laid off staff earlier this year.

Capitalizing on changes to capital gains

In just a few short days, it will be one full month since changes to capital gains taxation took effect, and the issue has largely fallen off the media’s radar. Even Tim Cestnick in the Globe and Mail only managed to mention capital gains once in a recent column about the dangers of “overtaxing the rich.” Instead, we have now entered the mitigation phase, to the financial benefit of savvy accountants and advisers.

For example, we came across this virtual presentation for doctors, hosted by the Ontario Medical Association and MNP LLP, as well as a detailed blog post. “We’ve invited tax experts from MNP to tell you about the changes, how they could impact you, and how you can help protect your savings and investments,” states the presentation, which as of yet does not appear to be available on-demand.

Through its national association, of course, physicians opposed the capital gains changes, yet failed in the end to convince the federal government or the public. Many pundits (including in conservative media) noted that doctors are allowed to incorporate and enjoy the lower tax rates. As we have noted, it was the Ontario government that allowed doctors to incorporate, so the government wouldn’t have to pay them more through OHIP premium increases. Watch for more doctor unrest in the future.

Accountant Dealbook: MNP adds business, firms

Hot off the heels of acquisitions in Quebec and the Maritimes, homegrown national accounting firm MNP LLP has announced further acquisitions, including several accounting firms and agronomy practices. MNP is joining forces with Carlson Roberts Seely LLP, a firm in Drayton Valley, Alberta, as well as Halpert Monsma Chartered Professional Accountants in Edmonton, Alberta.

MNP also continues to build its presence in la belle province, by picking up MTA CPA inc., a firm with six partners on Montreal’s South Shore, in addition to LD CPA inc., based in Salaberry-de-Valleyfield, in the Montérégie Region of Quebec.

And in one of the largest agronomy consolidations Canada has seen, MNP also acquired six agronomy companies this past week: 4R Agronomy, Annex Agro, Arrow Crop Management, Elite Ag, Max Ag Consulting, and Sure Growth Solutions. According to MNP, between the six companies, “they currently have more than 1.5M acres of farmland under management across more than 300 farms and, in joining MNP, will offer Canadian farmers a comprehensive solution for optimizing operations and profitability.”

Software News: Xero, Artificial Intelligence

Intuit announced this past week that it was letting go of about 10 per cent of its workforce, closing shop in Edmonton, Alberta, as it invests heavily in artificial intelligence. And speaking of artificial intelligence, we recommend an excellent article from Forbes Magazine, titled How Intuit, Xero, Sage And SAP Are Positioning AI To Change Your Accounting Department.

“For the most part the AI functions being offered by these companies today are nothing more than a glorified version of ChatGPT,” writes the author, who argues that not even the leaders in accounting software trust the conclusions of AI. Nevertheless, expect more progress to come, as this isn’t even the tip of the iceberg.

And speaking of Xero, the company has announced the return of the Xero Beautiful Business Fund. The competitions offers more that NZ$750,000 in funding to support small businesses and non profits with their growth plans and help drive future success. Entries for the Xero Beautiful Business Fund are officially open to Xero small business customers in Australia, Canada (excluding Quebec), New Zealand, Singapore, South Africa, United Kingdom and the United States. The entry period will close on August 27, 2024.