Sunday News Roundup 22.12.11: COVID clawbacks, PCAOB warnings, accounting firm dealbook, and more Canadian accounting news
Wrapping up the odds and ends from the past week in Canadian accounting news
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TORONTO, Dec. 11, 2022 – This past week the Auditor General of Canada, Karen Hogan, released her report on Specific COVID-19 Benefits to Canadians during the COVID-19 pandemic. While the details of overpayments to ineligible recipients is interesting, some Canadian accountants have viewed Hogan’s report with trepidation, anxious over the potential for further audit activities from the CRA.
It’s not just the CERB and CEWS clawbacks that could cause more headaches for busy practitioners across Canada. It’s the potential for reviews of the Canada Recovery Hiring Program (CHRP) and Canada Emergency Rent Subsidy (CERS). And now, on to the rest of the news from the past week in Canadian accounting.
US audit watchdog continues to send out warnings
One of the interesting outcomes of the US midtern elections is that the Democrats’ surprising showing removes any likelihood of political pressure on PCAOB. As reported by Canadian Accountant, the PCAOB has significantly increased its inspection reports to pre-Trump levels, and continues to issue warning signals to auditors that it is not happy with the state of audit quality in the US and elsewhere.
This week, PCAOB Chair Erica Williams declared: “Higher deficiency rates in 2021, coupled with the fact that the PCAOB is also seeing an increase in comment forms for 2022, are a warning signal that the audit profession needs to sharpen its focus on improving audit quality and protecting investors. The PCAOB will continue our work to increase audit quality by modernizing our standards,enhancing our inspections, and strengthening our enforcement.”
Fugitive tax protestor sentenced to jail in BC
Eric Ho — also known as Eric Siu-Kei Ho and Pat Lee — was an "educator" with a multilevel marketing company called the Paradigm Education Group, known for its "natural person" tax evasion scheme. A fugitive for 10 years, the Richmond, B.C. man was sentenced to prison this week, according to the Canada Revenue Agency.
Ho is not the first to have been convicted and the ideas of the scheme’s perpetrators have spread. But that’s not the whole story. Recently, the Tax Court of Canada scolded the Canada Revenue Agency over its treatment of three clients caught up in a separate “natural person” scheme, which led to this (corrected) column by Tim Cestnick in the Globe and Mail: The culture at Canada Revenue Agency needs a complete overhaul.
Underused Housing Tax: When will the CRA be ready?
A lot of Americans in border states were ticked off this year to learn that they might have to pay the federal government’s new Underused Housing Tax of one per cent on their vacation properties and summer homes. The UHTA seemed like legislation intended to address foreign condo buyers more than summer tourists.
But what bothers Canadian accountants is the lack of communications from the CRA around the filing process for yet another newly administered program. The CRA itself may be looking to the Department of Finance for further direction, though that doesn’t help practitioners with foreign clients.
Accounting Dealbook: ‘Tis the season to be merging!
BDO lands FL Fuller Landau SENCRL | LLP
Each December, we tend to see an uptick in mergers and acqusitions in the accounting industry, and this year is no different. This past week, we learned that FL Fuller Landau, the Montreal office of the mid-sized accounting firm founded in 1963, is merging with BDO. “The merger will expand BDO’s team in Québec and strengthen its position as a leading professional services firm in the marketplace.” Quite significant given FL Fuller Landau has 19 partners and a hundred employees!
MNP snaps up two more BC firms
Just one week after acquiring Quebec accounting firm Malenfant Dallaire S.E.N.C.R.L., homegrown national firm MNP has snapped up two firms based in British Columbia. The Bowra Group is a financial advisory practice based in Vancouver but with an office in Edmonton. The firm specializes in corporate insolvency and restructuring.
MNP, which has a strong bankkruptcy practice and is well known to reporters for its Consumer Debt Index, says the acquisition is of strategic importance (it has worked with the Bowra Group previously on bankruptcy cases.) Kerr & Company CPA has offices in Kelowna and Vernon. Its principal, Christopher Kerr, will join MNP as a partner and his team will move to the MNP Kelowna office at Landmark 7, working closely with MNP's existing teams in the Okanagan.
Quick Hits: Articles of Interest
CPA Canada is such a blatant money grab (Reddit r/accounting)
P.E.I. potato farmers sue federal government over release of tax information (CBC)
Sask. plans to create its own revenue agency, take more control over tax collection (CBC)
Tax & Spend: Unravelling the mystery of Ottawa’s misfiring hiring subsidy (Globe and Mail)
Paying taxes in instalments can bring trouble with the CRA if you make this mistake (Financial Post)
U.S. watchdog levies $7.7 mln in fines against KPMG entities (Reuters)
Sounds Like the EY Split is Going Forward Whether Partners Want It to Or Not (Going Concern)
EY sees other Big Four firms mirroring its proposed split (Reuters)
EY Leaves Key Issues of Split Undecided as 2023 Vote Approaches (Bloomberg Tax)
EY scraps US holiday bonuses as economic outlook darkens (Financial Review)
Accounting giant to ‘shut offices for two weeks to reduce energy costs’ (Energy Live News)
Meet the accountant who has revamped his 140-year-old business (Yorkshire Post)
What is a TikTok accountant? Origin of viral trend explained (SK Pop)
By Canadian Accountant staff.