Sunday News Roundup 21.10.24: Alberta embarrasses, audit expectations, business benefits and more

Wrapping up the odds and ends in this week’s Canadian accounting news

Oct 24, 2021 Author: Canadian Accountant

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TORONTO, Oct. 24, 2021 – How damaging was Alberta’s final report into foreign funding of anti-Alberta energy campaigns to the Canadian accounting profession? At a time when CPA Canada is lobbying hard to host the proposed headquarters of a new environmental global accounting standards body, an Albertan FCPA and Deloitte Canada have been mired in the shambolic fiasco of a public inquiry investigating environmental activists.

The public inquiry was led Steve Allan, FCPA, FCA, a forensic accountant and past president of CPA Alberta, who was dogged by conflict of interest accusations from the very beginning. Allan brought in Deloitte Canada, which was able to confirm $37.5-$58.9 million (a very large range) of foreign funding, in a report that ultimately admitted it could not find a specific dollar amount.

Allan and Alberta Premier Jason Kenney didn’t have the decency to appear for the release of the report, citing “legal advice to let the report speak for itself,” leaving the release to the Alberta Energy Minister. Allan has tried to walk back the fallout by saying that environmentalists are motivated by genuine concern, and the reputation of the Alberta energy “war room” is likely irredeemable, but the political damage has been done.

How much this will hurt Canada’s reputation as an honest ESG player going into the COP26 climate change conference is impossible to gauge. But it cannot help Canada’s bid — supported by CPA Canada, the finance industry, and Finance Minister Chrystia Freeland — to host a new accounting body that would bring millions of dollars in business to Canada.

And now, on to the rest of the odds and ends in news from the world of Canadian accounting.

Covid benefits to be scaled back. Now what?

Canadian accountants have long complained that the Keynesian economics of pandemic benefits were too generous to individuals — and not generous enough to businesses. Now the Canadian government has announced a massive scaling back of both business and individual benefits as of October 23rd. According to Patrick Brethour in the Globe and Mail, “The massive subsidies to workers and businesses during the pandemic are the main drivers of the large federal deficit, which was an estimated $354.2-billion in 2020-21, according to the April federal budget.“

Accounting profession proposals address audit expectation gap

CPA Canada has teamed up with the ACCA, AASB and CA ANZ to issue a report narrowing the “expectation gap.” This past week, CPA Canada issued a press release on a new report, “ Closing the expectation gap in audit – the way forward on fraud and going concern: A multi-stakeholder approach” (which can be downloaded here).

The report arrives in the wake of high-profile audit failures, specifically in regards to fraud and going concerns, primarily in the US and UK. It proposes a number recommendations regarding the involvement of forensic accountants in audits, but stops short of calling for their mandatory inclusion.

BC lawyers contend anti-money laundering policies

Lawyers say they should be excluded from money laundering policies in B.C. Canadian Press covered the spectacle this past week two BC lawyers associations arguing in court that client that they are “concerned about suggestions that there is a high risk of money laundering inherent in the work of lawyers.”

A coalition of groups has called for lawyers, bankers and accountants to be included in any future policies aimed at curbing money laundering. CPA Canada and CPA BC appeared before the commission last March.

PwC sells global mobility unit to private equity

To most Canadians, “global mobility” sounds like a cellphone service, but to PwC it’s an underperforming unit that advises companies on tax and immigration issues when they move staff abroad. So PwC is selling the unit and its substantial operations in Australia, Canada, and the Middle East to a US private equity company. Global mobility advisory has been hit hard by the pandemic and changing work models. The unit has about 15 employees in Canada.

As firms move to hybrid work models, less foot traffic on the PATH

Interesting story this past week in the Globe and Mail regarding Toronto's massive underground shopping system known as the PATH. It seems that foot traffic in the PATH has slowed to a standstill as the tenants in Bay Street’s office towers have moved their employees to hybrid work models — including PwC Canada.

The small retail shops — everything from food outlets to fashion outlets to shoeshine stands — depend on the white collar workers in the towers above them. Once considered highly desirable retail space, the businesses are struggling.

KPMG picks up Ottawa CPA Firm

Accounting firm Allan and Partners LLP of Perth, Ont., southwest of Ottawa, has been bought by KPMG Canada. The Big Four accounting firm has been picking up several small firms in the Ottawa region on both sides of the provincial border. “It’s big for us,” said founder Howard Allan. “I’m happy that KPMG are coming to Perth.”