Sunday News Roundup 23.01.22: Man bites dog — Conrad Black and CPAB, livid CRA workers, and more Canadian accounting news
Wrapping up the odds and ends from the past week in Canadian accounting news
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TORONTO, Jan. 22, 2023 – Last week we reported that taxation employees at the Canada Revenue Agency were “fed up” with working without a contract for more than a year. They plan to vote on strike action during tax season and may go on strike close to the deadline. Now, the CRA has filed an unfair labour practices complaint against workers’ union, claiming it is not bargaining in good faith, and is asking for the union to be forced back to the bargaining table.
Negotiations have taken a nasty turn and workers are “livid” and the complaint “insulting” according to the union. For its part, the union accuses the CRA of refusing to table a wage offer, and implementing a return-to-work order when that was a key bargaining issue. Regardless of the issues, it appears that relations between the two parties is toxic, and may impact customer service at the CRA.
And now, on to the rest of the news from the past week in Canadian accounting.
Conrad Black bites CPAB: Canada’s audit watchdog “abusively authoritarian”?
It’s been a long time—perhaps never—since anyone accused the Canadian Public Accountability Board of being too harsh in its regulation of Canadian accountants. National Post columnist Conrad Black devoted an entire column, The overreach of the agency tasked with auditing the auditors this past week to CPAB, which Black lumps in with the College of Psychologists of Ontario and “renowned public intellectual Jordan Peterson.”
Black blames CPAB’s “intensive scrutiny” for “a serious shortage of firms willing to conduct audits.” He may find a sympathetic ear at the conservative, Washington-based New Civil Liberties Alliance, which says the disciplinary process at US Public Company Accounting Oversight Board (CPAB’s American counterpart) is "biased," "secretive" and unconstitutional.
Corporate fraud professor critical of Canadian regulators
Meanwhile, David Milstead at the Globe and Mail published a story this past Monday about Alexander Dyck, a finance professor at the University of Toronto, whose study on the pervasiveness of corporate fraud was published in the New York Times (and which we reported in last week’s Sunday News Roundup). The professor estimates that about 40 per cent of US companies are committing accounting violations.
Towards the end of the article, Mr. Dyck compares the regulatory environment of Canada and the US, and finds Canada to be wanting. Canada has a less active set of enforcers, such as the SEC (and by extension, the PCAOB), and class-action lawyers. “I think that the problems are at least as bad here as they are in the U.S., and that would say that the undetected fraud is probably higher in Canada than it is in the U.S., at least for the non-cross-listed [companies].”
Timelines emerge for Ernst and Young split
Last week the Financial Times reported that EY Global will spend big bucks on branding ($400 million) its new consulting business and buying up consulting companies ($2.5 billion) after it splits. This week the news emerged that EY Global is looking at late 2023 or early 2024 to publicly list its proposed consulting arm. The Big Four professional services firm is looking at putting its proposed split to a partner vote in March or April according to Reuters.
Want to retain accounting employees? Try “stay interviews”
Media coverage about a shortage of accountants in the US has been extensive. Just this week, the Wall Street Journal published: Tax Season Is Coming, and These Firms Can’t Find Enough Accountants in the U.S. The article says US firms are “ditching audits and hiring overseas.”
If you’re managing a Canadian firm and worried about retaining your employees, read How firms use stay interviews to boost retention, which was just published in the Journal of Accountancy. It explains how to conduct a stay interview and even includes a list of potential questions.
Deloitte Canada: More clean tech, fewer digital barriers
Two new reports came out in the past week from Deloitte Canada. According to Scaling Solutions: Accelerating the commercialization of made-in-Canada clean technology, Canada must accelerate commercialization of domestic clean technology to meet climate goals. And on Intelligent CIO, many Canadians still face barriers to participating in the digital world, impacting Canada’s ability to compete globally.
Accounting software news
Good news for aspiring accountants in Alberta. Xero and the Southern Alberta Institute of Technology (SAIT) have launched a new bursary for students in need. Called the Xero Accounting Futures Award, the new bursary will offer $3,000 CAD each year for three years to a different promising young student in financial need.
Quick Hits: Articles of Interest
Taxpayer tries to claim parking costs as medical expense, claiming discrimination for travelling short distances (Financial Post)
Some banks will charge businesses a monthly fee to pay their taxes (Globe and Mail)
Splitting income with family can save meaningful tax dollars (Globe and Mail)
As Davos opens, Oxfam urges windfall tax on food companies (Globe and Mail)
China Evergrande's auditor PwC quits over 2021 audit-related matters (Reuters)
'Why I wrote my resignation letter from KPMG at 6am on Christmas Day' (UK Business Live)
Big Four accountants in Spain probed over long hours (UK Financial Times)
By Canadian Accountant staff.