Sunday News Roundup 24.11.10: Trump taxes and trade, audit watchdog heeled, and more Canadian accounting news

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TORONTO, November 10, 2024 – Just days after the sweeping victory of Donald Trump in the US presidential election, Canadian pundits were out in full force offering analysis, predictions and — in the case of some lobby groups — wish lists. Among the first out of the gate was the conservative Fraser Institute, opining that a Trump victory means Canada must “get serious about tax reform,” followed closely by Pierre Poilievre’s favourite economist, Jack Mintz, who writes for the Financial Post. 

Their solution to a US combination of tax cuts and protectionism through tariffs? Slash business and personal income taxes (the Fraser Institute) and slash taxes, deregulate and tie our economy more closely to that of the United States (Mintz). Both struggle with the idea that a free-market American president would combine lower taxes with tariffs in a realignment of neoliberal ideology through protectionism and the onshoring of US manufacturing jobs lost through free trade. 

Most pundits, such as David Olive and Ian Lee, agree that Trump’s second term in office will be disastrous for Canada. But watch for two other lines of thinking to emerge in the coming weeks. The first is that Canada should leverage its trade relationship with China to offset threats of US protectionism — watch for China to extend an olive branch — and the second is to return to a time of economic nationalism prior to signing of free trade deals. 

But if you’re looking for more positive news, read Five ways that Donald Trump’s election victory will help Canadian accountants. And now, on to the rest of the news from the past week in Canadian accounting. 

Will Trump bring the US audit watchdog to heel?

The Public Company Accounting Oversight Board in the United States released its 2024 inspection report this past week of Montreal-based accounting firm Richter SENCRL/LLP. The inspection report itself was unremarkable—two audits reviewed, one with deficiencies, some concerns around communication rules, and a polite reply from the auditors in response. 

We should enjoy these reports while we can, as we predict that the golden years of the US audit watchdog, when it led the world (including Canada) in audit compliance, is swiftly coming to an end. The Achilles’ heel of the PCAOB has always been its vulnerability to partisan politics, and the incoming Trump administration looks hell-bent on deregulation. 

PCAOB Chair Erica Williams’ second term won’t end until 2029, but watch for the Republicans to slash the PCAOB’s budget and appoint laissez-faire partisans to the PCAOB board. At some point, Williams may leave for greener fields, as others have done before her, once the political winds shift. Want to know what this means for Canadian firms? Read Five reasons why Donald Trump’s election victory is good news for Canadian accountants. 

CPA bodies reach agreement on standard setting

Earlier in the week came the news of a deal reached on continued funding for standard setting in the Canadian accounting profession. While CPA Ontario and L’Ordre des CPA du Québec will split from the national body in withdrawing from the Collaboration Accord, effective December 2024, agreements have now been reached on standard setting and education. 

According to an email to members from CPA Canada: “Under the terms, the withdrawing regulators will continue to remit part of their member dues to fund CPA Canada’s stewardship of the standard-setting process and CPAs in both provinces will continue to have access to the CPA Canada Handbook and Board Guidance.” 

CRA stories: Hacks laid bare, no trust(s)

The fallout continues from a CBC/Fifth Estate investigation revealing that not only were Canada Revenue Agency accounts hacked during last year’s tax season but the CRA hid the news from Canadians. Politicians are now calling for an investigation into why the CRA paid out millions to fraudsters who hacked confidential data obtained through H&R Block. 

Which brings us to the subject of National Revenue Minister Marie-Claude Bibeau. First there was the bare trusts fiasco—the Liberals just announced a deadline extension and we wouldn’t be surprised to see a new government shelve the whole thing—and then the secrecy around the hacks. Bibeau recently announced that she is leaving the Federal Liberals to run for Sherbrooke mayor. 

It almost makes you long for the days of Diane Lebouthillier, had she not ignored scientific evidence upon reopening the cod fishery in September off the coast of Atlantic Canada.

Software News: Xero Mentor Match, Sage Intacct

Xero

The accounting profession is facing various hurdles and accountants need all the support they can get. Xero has launched a new program called Mentor Match, a peer-to-peer mentoring initiative for Xero’s US and Canadian accounting and bookkeeping partners. Mentor Match is for all Xero partners (anyone who works in an accounting or bookkeeping firm that is part of the Xero partner program), from practice owners and decision-makers through to undergraduates and interns. Let the matchmaking begin! 

Sage Intacct

With most accountants feeling like they spend far too much time on manual administrative and compliance tasks, financial software company Sage is providing a solution by recently launching Sage Intacct Accountants in Canada. According to its press release, “Sage Intacct Accountants empowers accounting practices with the flexibility to choose between two pathways — Standard and Professional — based on their unique business models.” 

We recently discovered that homegrown national accounting firm MNP LLP was Canada’s first accredited Sage Intacct Accountants Program partner. 

Quick Hits: Articles of Interest

Canadian

Alberta government fires AIMCo board, four top executives, in 'reset' for pension fund manager (CBC)
Tax Court of Canada welcomes new judge Perry Derksen (Canadian Lawyer)
Capital gains inclusion rate hike remains up in the air, but you still have to prepare for it (Financial Post)

International

PwC Australia faced expulsion from global network if it didn’t toe the line (The Mandarin)
EY fires staff who took multiple online training courses at once (Financial Times UK)
KPMG to lay off less than 4 per cent of U.S. audit workforce, source says (Globe and Mail) 

By Canadian Accountant staff.