Number of the Day: $868,000
That’s how much Canadian companies paid on average in audit fees in 2019, up from $621,000 in 2018, according to a post by our friends at Canadian Accountant, citing research from Audit Analytics: “Since 2007, the average amount of audit fees per Canadian company has continued to increase each year, with the largest increase coming […]
Audit Deficiencies Got Much Worse Among Big 4 Firms in Canada
I came across an article on the site Canadian Accountant this morning that said Canada’s audit regulator, the Canadian Public Accountability Board, recently issued its annual inspection results for 2018, finding significant audit deficiencies increased from 15 in 2017 to 34 in 2018. Thirty-four total significant deficiency findings might not seem that bad compared to […]
Deloitte Summer Interns Challenge Rival Firms to Step Up and Get Drenched in Ice Water
Surely you've seen the ice bucket challenge, perhaps you've even participated yourself. In case you don't know, basically you get a bucket of ice water dumped on you, nominate two friends to do the same, and if they don't, they have to donate $100 to an ALS charity. Now, some have argued it's a bit […]
Groundbreaking Study Discovers Big 4 Partners Tend to Be Hardworking, Male, and White
What makes a Big 4 partner? Chris Carter, Crawford Spence and Claire Dambrin (academics, natch) set out to find that answer, looking specifically at partners in Canada, France and the UK. You will not be surprised by the results. First, they discovered that only about 2-3% of those who start out at Big 4 make […]
Meanwhile in Canada, You Get a Tax Credit For Not Stinking the Joint Up
Apparently my Canadian pal Krupo is playing around with some tax software and tipped me off to an interesting tax credit for the farmers of Manitoba. The aptly-named Odour Control Tax Credit (translation for our fellow Americans who don't understand what in the hell that word means when there is a stray U thrown in […]
The AICPA and CPA Canada are Totally Working on NAFTA for Financial Services, You Guys
This is where we need a Ross Perot to come in and explain to us how this means thousands of poor American CPAs will lose their jobs. Straight from the horse's mouth: Chartered Professional Accountants of Canada (CPA Canada) and the American Institute of CPAs (AICPA) today announced an agreement that will enhance consistency in […]
As CGAs, CAs and CMAs in Canada Join Together Under the CPA, an Awkward Video to Celebrate
If you aren't aware, they're doing a little remixing of credentials up there in Canada, so naturally they did an actual remix to hammer the point home before everything becomes official across the country. Note the Canadian CPA — or Chartered Professional Accountant — is not to be confused with the American CPA. Hopefully it […]
PwC Helping Blackberry Stay as Comfortable as Possible
Cutting 40% of your workforce is certainly a sign that the end is near and now this report from Bloomberg has PwC on the scene to guide the company into the afterlife: BlackBerry Ltd. (BB), the struggling Canadian smartphone maker, has hired accounting firm PricewaterhouseCoopers LLP to evaluate the company for potential buyers, according to two […]
(UPDATE) Canadian Officials Not Impressed with Ernst & Young’s Audits of Sino-Forest
Up until this point, Ernst & Young has seemed perfectly content to see how this Sino-Forest situation (some have called it a "Ponzi scheme") would play out, standing quietly by their audit opinions without so much as a peep*. Canadian regulators, possibly impatient with the radio silence, have decided that they'll open things up, as the Ontario Securities […]
Recruiting Season Regrets: The Guy Who Passed Up a Career with Deloitte to Sell Copious Amounts of Pot
Right now, many accounting students are giving serious thought to their futures. Right this very minute, in fact, a few are gnawing their already bloody fingernails waiting for a Going Concern blogger to tell them what to do with their lives. They can't trust their parents and friends so it's only natural that they ask […]
Someone Is Sending Out Bogus PwC Checks, Again
Back in 2010, some criminal masterminds perpetrated a scheme where bogus checks bearing the PwC logo were sent to random people informing them that they have been selected to be "secret shoppers" requesting them to cash the checks at specific banks and then to wire them to another secret shopper. It would sound pretty good […]
Grant Thornton Now Offering Insight to Fictional Advertising Agencies
According to a press release, GT's Canadian arm has found a new place to find dynamic clients – TV! Grant Thornton LLP has just published Foundation for Growth, a white paper that presents the results of research and analysis into how professional services firms view their performance and people, their planning and profitability. It contains […]
Accounting Students Looking for That Extra Edge Should Look No Further Than Big 4 Bootcamp
Many dewey-eyed accounting students dream of capping off their time in college with a job at a Big 4 firm. But getting that elusive offer isn't as easy as it seems. There are many ambitious candidates that would step over their own mothers to get an offer so some candidates want a little extra edge […]
Want a Transfer Within Your Accounting Firm? Then Don’t Get Wishy-washy Over Money.
Ed. note: Stuck in a predicament at work? Not sure how to break it off with your busy season love interest? Wondering how best to prepare for bonus disappointment? Email us your questions. Anything goes. Dear Going Concern, A question from the great white north. I'm a second year auditor with a Big Four […]
Toronto Protesters Find KPMG to Be as Charming as an Eel
This has the potential for a great singalong: Injured workers, their families and friends will be outside KPMG headquarters on Friday, December 23rd, insisting that the consulting firm is the 'Grinch Who Stole Christmas' for recommending that the Workplace Safety and Insurance Board drastically cut compensation to workers who have been injured on the job. KPMG, […]
There Are a Lot of Hungover, Newly Chartered Accountants in Canada Today
We like to cover the international scene as much as we can but it can be tough sometimes when NO ONE EMAILS US. If you’ve got some from north or the border, south of the equator or across an ocean, simply email us at [email protected] and we’ll spice things up around here with some international flair.
I only bring it up because this morning a Canadian reader informed us that today is a big day up north.
I’ve noticed the content on GC is nearly entirely CPA-focused, even though there’s plenty of readers from north of the border! I realise this is likely partially due to the fact that Canadian readers aren’t helping contribute enough. In an effort to help spread the love, I provide the following:
As a bit of background to our system, Canadian Chartered Accountants (CAs) must pass a single national final exam called the Uniform Evaluation (UFE). The UFE is a three-day national exam held once a year in September. The results are then released nearly three months later, usually on the first Friday of December (today!). It’s generally tradition for all the writers (and those that support them) to head out to the bar the night before to help ease the anxiety of checking the results in the morning, which leads to a lot of cheerful new CAs with hangovers today. This tough day of work at my firm (and many others) consists of champagne breakfast with colleagues, lunch with the partners and the office heading back to the bar by 3pm.
Congratulations to all the new CAs!
Scores are officially released at 12 pm so if you’re waiting to enjoy some Mimosas until you get the official word, that’s your choice but either way, you can use this post as a thread for your pre-noon-newly-minted-CA-partying purposes.
Comp Watch ’11: Big 4 Starting Salaries North of the Border
There’s been quite a bit of chatter out of Canada recently (Happy Thanksgiving, btw) and we now have some of the details for those receiving offers from 3 of the Big 4.
KPMG is offering $40,800 per year. They claim they will pay over time if you work over 40 hours per week.
PwC is offering $40,800 per year with a 0-15% bonus based on performance.
EY is offering $40,500 per year. No mentions of overtime.
This is for the Toronto offices and these figures are all in Canadian Dollars, which comes out to slightly below $40k USD but with the possibility of overtime, obviously the haul could be a lot more. If you’ve heard different numbers (or any Deloitte numbers at all) for these firms, get in touch or discuss below.
Is the IRS Going to War with Canada?
Wars with Canada turn out badly. While the Canadians are a seemingly peaceful people, content with their Tim Horton’s and their hockey, they seem to come out on top in a fight. Ethan Allen and Benedict Arnold learned that lesson early on, and things went no better in 1812.
Now IRS Commissioner Shulman is baiting Canada for another war:
Premier David Alward, one of New Brunswick’s best known dual citizens, says he has been caught in the same broad net U.S. officials have cast to catch international tax evaders.
This prominent Canadian has been dragged into a U.S. tax nightmare the same way as thousands of other well-meaning expats:
Alward was born in Beverly, Mass., and spent his early years in the United States before his family settled in New Brunswick.
“I’ve had to scramble like thousands of other people,” Alward said, adding that he is complying with the U.S. demand for tax returns going back years and detailed disclosures.
The IRS is going after offshore tax violators in a big way. It’s natural that there are more in Canada than anywhere else because of geography and economics. But the IRS approach has been to enforce traffic safety by shooting jaywalkers.
While the US taxes its citizens on worldwide income, many, maybe most, expatriates have little or no U.S. tax liability. The foreign earned income exclusion and the foreign tax credit take care of that. But the long-obscure “FBAR” requirement to report foreign financial accounts over $10,000 threatens to impoverish many of these people anyway. The penalties for failing to file the FBAR Form, Form TD 09.22-1, are the greater of $10,000 or half the value of the account. The IRS is freely asserting these penalties even when little or no tax is due, and is even applying them to Canadian retirement accounts of U.S. expats like Alward.
The IRS has had two “amnesties” to draw expats into its loving arms, and the program has been a disaster for many ordinary folks who have signed up to try to clean up their records. Taxpayers living in Canada since childhood are presumed to be tax cheats, and penalized accordingly.
The IRS could learn a lot from states in handling these issues. The IRS “amnesties” have been progressively more restrictive, with higher penalties, making it more and more dangerous for folks with trivial paperwork violations to come out of the cold. Many states, in contrast, have standing deals where out-of-state taxpayers can clean up their tax histories by filing a few years of back tax returns, no questions asked. If the IRS would take this approach, and waive FBAR penalties for accounts under, say, $200,000 — and for all retirement accounts –maybe we won’t have to worry about the White House getting sacked again.
Some Are of the Opinion That Deloitte’s Services Aren’t Worth $90,000 a Day
I don’t care how you try to explain it away, in this day and age of tight budgets and runaway deficits, $90,000 per day is way too much to pay an accounting firm for advice on how to cut $4 billion from Ottawa’s budget, particularly since the proposed cuts Deloitte comes up with are unlikely ever to be acted upon[.] [NP]
KPMG Suggests Toronto Let the Lawn Get Out of Hand a Bit, Wait Longer to Shovel Snow to Cut Some Spending
The City of Toronto needs some help with ideas of how to cut some spending in their budget. STAT. Enter KPMG. They have to find savings where they can and sometimes that means making suggestions that may not go over so well. For example, those perfectly manicured lawns you see around the city? That’s due to a weekly grass cutting regimen. And guess what? It’s gotta go:
The report […] says weekly grass cutting may not be necessary except for “high-use surfaces” such as playing fields. Public works chair Councillor Denzil Minnan-Wong recently complained that a wet spring had grass and weeds growing out of control on city sites and called for more grass cutting.
Can you imagine if the City of New York let the grass go for an extra few days? You can just imagine the outrage. Anyone with a park view would be calling up 411 to complain that they can see “weeds” and “that jungle of a lawn” from their veranda on the 20th floor. “Absolutely shameful,” they’d say. Not sure if Toronto’s residents are so hung up on those sorts of details but it stands to reason that there are at least a few citizens who are meticulous about the city’s lawns.
Anyway, KPMG had another suggestion:
KPMG says the city could wait for more than five centimetres of snow before clearing parking lots and pathways, although there would be increased risk of “slip and fall claims.”
Of course Canadians are little tougher when it comes to the snow, so a couple more inches of snow is probably NDB. But with the offset of increased “slip and fall claims” this could be a net zero effect.
But the best savings idea of all? Those zoos and “farm attractions” that your kids love so much? Those should probably go too:
“Consider elimination of the zoo and farm attractions . . . Some zoo and farm attractions could be closed, however, these are enjoyed by many Toronto residents,” the report states.
Happy families out on a Sunday be damned! There’s a fiscal crisis to be averted! The city still has to decide whether to implement these suggestions but if they do, KPMG will have crying children to answer to. Ones that aren’t employees.
Close small zoos and Riverdale Farm, consultant suggests [Toronto Star]
You Can Add ‘Hospital Staff’ to the List of Positions That Can Do the Job of a Deloitte Auditor
A hospital in Winnipeg is suing Deloitte after an ATM scam went undiscovered for over ten years. Luckily some vigilant RN, janitor or cafeteria worker (it’s not clear from the article) noticed something amiss and alerted the proper authorities.
Police arrested a long-time hospital employee last year after she allegedly skimmed $1.5 million from automated teller machine (ATM) deposits between 2000 and 2010.
According to a lawsuit filed last week, the fraud was uncovered by hospital staff, not the auditor. The lawsuit accuses Deloitte & Touche of preparing financial statements not in accordance with “generally accepted accounting principles” and “materially misleading” the hospital about its financial position.
“MHC says that D & T owed it a duty in contract and owed it a duty of care not to act negligently or make negligent misrepresentations to MHC and to ensure that cash and liquid assets as reported in the financial statements were not materially misstated.”
According to the lawsuit, a former finance clerk deposited Worker’s Compensation Board cheques into the hospital operated ATM, understated the amount and pocketed the difference.
All this trouble and no one was even taken hostage. Not good, Green Dot.
Misericordia Health Centre files suit against auditor [Winnipeg Sun]
PwC’s Calgary Office Takes a Don’t Hate, Congratulate Stance on Furlough Fridays
More Big 4 news from the True North, as the Calgary office of PwC has been forced – due to ‘unique market conditions’ – to close the office five times over the summer to compete with the oil and gas companies that shut down every Friday.
Calgary Summer Office Closures
As we all know, recruiting and retaining our people is critical if we are to achieve our marketplace and firm goals. Calgary is one of the toughest markets in which to retain our people. The Calgary leadership believes that one of the key reasons is the extent of time off provided by companies in Calgary. Driven by the oil and gas companies, shutting down on Fridays in the summer is a practice followed by many companies in Calgary, including our clients.
For whatever reason, the email reads strangely apologetic, as if the leadership knows how much everyone loves working on Fridays and that they HAD NO CHOICE but to take these measures are absolutely necessary:
We believe that to be an employer of choice in Calgary we must respond to these unique market conditions with the result that, on Monday, May 30, Calgary will announce that the office will be closed on five Fridays over the course of the summer. Given the strategic importance of our Setting the Pace market segment priority, we think we must move in this direction, otherwise we will continue to be at a competitive disadvantage as we seek to grow the practice and attract and retain the people we need to do so. Going forward, we will assess the continuation of this policy in Calgary based on market conditions.
And finally, it was pointed out that everyone is aware that this is grossly unfair but A) it had to be done and B) everyone will be made right one way or another:
We also think it’s important to be transparent with you around this policy so that you understand the rationale. We appreciate that adopting these office shutdown days solely in the Calgary office gives them more benefits than the rest of the firm. Our view however is that we must adopt practices that are competitive and appropriate in each of our local markets and the Calgary market presents a unique situation.
We recognize that everyone is working hard and contributes to the firm’s success. That’s why we encourage everyone to take advantage of the various forms of flexibility available, particularly during our less busy times. These include Flexible Fridays, which will be announced next week for offices outside of Calgary, Flexible Time Away, our new Flexibility code and, of course, your vacation.
Yes, don’t forget that you could use five days of vacation as opposed to being given the non-option to stay home from work. That gets everyone back to Even Steven.
Man Attempts to Pay $6,400 Tax with Kiddie Pool Full of Pennies
God bless our friends to the North. If you can’t have a sense of humor about this stuff, you’re likely to do something stupid like, say, join the Tea Party:
A Quebec man, fed up with his skyrocketing property taxes, carted more than 200,000 pennies down to City Hall to pay his bill. But he was denied, and asked to simply cut a cheque.
Normand Czepial of Ripon, Que. — less than an hour’s drive northeast of Gatineau — arrived at City Hall on Wednesday with a children’s pool filled with 213,625 pennies.
Now we’re wondering – did Normand roll into his bank that morning to make the withdrawal and demand the smallest denomination possible or had he been saving all the copper coins his entire life for this exact moment?
Whichever it is, we applaud this particular brand of awesome. The only beef we have this move is that he used the kiddie pool to schelp the pennies down to City Hall. What the hell, man? Depriving your kids of fun in the middle of summer? Sure you’re a little bit of smartass (which we like) but it appears also a bit of dick in the Dad Department. Not cool.
Czepial’s property tax bill reportedly rose by nearly $4,000 dollars last year to $6,400. Czepial tried to pay with pennies to protest the hike.
Ripon Mayor Luc Desjardins was surprised to see the stunt, but had to tell Czepial to find another way to pay his bill.
Under the Currency Act, nobody is obliged to accept more than 25 pennies as payment for any product or service. Normand Czepial, unfortunately, was 213,600 over the limit.
Even the Toronto Sun is throwing around the jokes! Everyone that is threatening to move to Canada given a particular election of [insert hated political figure] should take note that it sounds kinda fun up there!
Man tries to pay tax with 200,000 pennies [Toronto Sun via TaxProf]
Alexandre Bilodeau Is KPMG Canada’s Phil Mickelson
When our Olympic Fever started last weekend, we had no idea what would happen. Sure there would be torches, majesty and endless montages but if you had told us that we would discover that KPMG has got dibs on a marketing dynamo like Alexandre Bilodeau, we would have said NFW.
AB was the first gold medalist for Canada in the Vancouver games. He won the Freestyle Men Ski competition on Sunday and now he’s got people just throwing money at him.
However, Al has had KPMG as a sponsor since 2006 (longer than Phil!) when he competed in Turin, Italy (the old man is a tax partner). All these new companies that want a piece of Golden Boy are going to have to get behind T Fly and Co. because Al strikes as a loyal guy.
KPMG Canada nailed this one. This dude is young, handsome, and doesn’t have to worry about a slimeball rival returning to steal the thunder. Now if he could only win the U.S. Open…
Canada Somehow Ranks Ahead of Mexico in PwC’s Global Economic Crime Survey
That means our neighbor to the north ranks numero uno for North America.* They rank 4th in PwC’s report behind Russia, South Africa, and Kenya with 56% of the Canadian respondents reporting incidents of fraud.
And no, it’s not all because the country is full of crooks, it’s party because Canada has more
So does Canada have more thieves in our midst, or are we just better at ferreting out perpetrators?
The study suggests there is a bit of both. Tipoffs from internal or external sources are higher in Canada than in other countries, as is our ability to detect fraud through electronic means. Automated systems used to detect inconsistencies or suspicious transactions accounted for more than 10% of frauds detected by companies in Canada. Thanks to rats and routers, more crimes are being reported in Canada then elsewhere.
By contrast, the PwC report argues that the overall decrease since 2003 in reported crimes elsewhere in the world does not necessarily speak to their better anti-crime fighting abilities, but rather to an “overall breakdown in anti-fraud regime controls which would usually assist in the detection of economic crime.”
So wait a minute, not only does Canada have more tattletales, they also have a superior ability to detect fraud “through electronic means”? Does anyone buy this? That must be the case with the other countries that are keeping Canada company in the top 5, right?
We’re more inclined to go with the notion that Canada doesn’t do such a good job discouraging would-be Mini-Madoffs. According to one expert: ‘We don’t put anyone in jail.’
There you have it. A simple dose of PMITA prison for the Earl Jones and Gary Sorenson types should get The True North out of the top 5.
Canada a fraud nation? [Financial Post]
*We will not be splitting hairs with anyone on whether Mexico is technically part of North America or Central America so don’t even bother going there.