Sunday News Roundup 22.06.26: Cullen, KPMG, MNP and more Canadian accounting news 

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TORONTO, June 26, 2022 – While the biggest business story of the past week — one that concerns most Canadian accountants — was the spike in inflation, Radio Canada reported that the investigation into the infamous Isle of Man tax avoidance scheme has been completed for more than a year. KPMG Canada has said it has been cleared of any wrongdoing in the case by the Canada Revenue Agency. Oddly enough, however, CBC changed the headline, abbreviated its report, and the message "More to come" has been on the page for days. What gives?

The original title was “Criminal probe into KPMG offshore tax scheme ends in secrecy,” and National Revenue Diane Lebouthillier was “no longer talking about the case.” As loathe as we are to send readers to news aggregator websites, the original article is still available here, or you can read some of our own commentary. And now, on to the rest of the past week’s news from the world of Canadian accounting. 

BC money laundering and the role of accountants

Oops. Our apologies for missing the Cullen Commission Final Report when it was released earlier this month. Buried in 1,831 pages about money laundering in British Columbia was an entire section on role of the accounting profession. That includes the position of CPABC and CPA Canada, who “strongly dispute that there is a money laundering problem in British Columbia with respect to CPAs,” a position with which Cullen “respectfully” disagrees. 

Cullen wants CPABC’s regulatory oversight extendeded to anti–money laundering regulation and sees this as consistent with the regulator’s duty to protect the public interest. (He spends several pages arguing his case in opposition to CPABC and CPA Canada "expressing the view before me that CPABC’s mandate does not extend to anti–money laundering regulation of its members.") Cullen also spends a great deal of time on the issue of unregulated accountants (non-CPAs) and their relation to money laundering. 

Regardless, the report as a whole calls for more regulation of professionals, a new level of AML policing and oversight, but could only bring itself to say that governments “failed to grasp” the nature of the problem, a position that has angered whistleblowers. That position is not one shared by the BC public. 

MNP $1M donation a uniquely Canadian contribution

Homegrown national accounting firm MNP has announced a $1 million donation toward the Prairie Innovation for Sustainable Agriculture at Assiniboine Community College. It’s a uniquely Canadian, grassroots contribution, as the donation was made in honour of MNP founding partner Don Penny (Meyers Norris Penny LLP), who died in 2019. 

Penny co-founded MNP in Brandon in 1958 and Assiniboine is based in Brandon and the Westman Region of Manitoba. It seems like the perfect match to honour the roots of a local accounting firm that has grown into Canada’s largest mid-size, national accounting firm. 

KPMG Canada makes some noise in the metaverse

On Wednesday, KPMG US and KPMG Canada announced that they had opened the first KPMG “collaboration hub” in the metaverse, the latest craze in three dimensional worlds. KPMG has been on a roll lately, having announced large investments in cryptoassets, non-fungible tokens, and now the “next step in both firms' journeys to lead their people and clients into Web 3.0.” 

KPMG seems determined to carve out a niche for itself in new tech. "Launching a collaborative space in the metaverse is a natural evolution in our journey as an innovation-driven firm," said Elio Luongo, chief executive officer and senior partner at KPMG in Canada. The US accounting website, Going Concern, had a typically iconoclastic review, comparing the metaverse to similar forays into Second Life (remember that?) more than a decade ago. 

Quick Hits

Claiming a foreign tax credit proves to be a bit dicey for one taxpayer (Financial Post)
Cape Breton women behind massive tax fraud handed prison terms (CBC)
Saskatoon Lighthouse director used shelter funds for personal loans (CTV)
B.C. Legislative Assembly’s top financial executive gone (Richmond News)
An US$8b ESG market pits EU lawmakers against audit firms (Bloomberg)
Ford government’s appointment of Heather Zordel as OSC chair prompts resignations (Globe and Mail)
Fraser Institute’s ‘Tax Freedom Day’ Wildly Exaggerates the Tax Bill of the ‘Average Canadian Family’ (PressProgress)
A cottage succession story to learn from (Globe and Mail)
Audit Watchdog Stiffens Rules on Lead Auditors’ Supervision of Outsiders (Wall Street Journal)
Accounting Firm EY Grapples With Partner Pay, Bear Market in Breakup (Wall Street Journal)
What CPAs Should Think About During This Crypto Winter (Forbes)

By Canadian Accountant staff.