A Counting School - Hardcore Chartered Accountancy

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Can I invest in my child's training as a tax deduction and then get a nice refund when she becomes a successful pro?
That's an easy question. The answer is no . Eugenie Bouchard's father thought he could create a partnership where the money he spent on training his daughter could be used to generate a tax loss. Unfortunately tax law in Canada doesn't allow you to enter into a contract with your 9-year-old daughter. To quote the article, "The investors in the partnership had intended to make their contributions in exchange for 10 per cent of Ms. Bouchard’s future tennis earnings, up to the amount they contributed, plus a 10-per-cent rate of return per year. But as the court ruling noted, Ms. Bouchard was never a party to the partnership despite being the source of its income – as a nine-year-old, she could not reasonably have consented to signing away part of her future earnings. Instead, Tennis Mania’s business model relied on her goodwill to honour its terms. In the eyes of the law, that wasn’t enough." It's an interesting idea, but not something that actually works.
That whole "CPA, CA" thing? Someone at the ICAO tripped up yesterday
Yesterday I noted that the nomination period for the next ICAO council election is now open. One of my friends noticed that the original invitation to vote was signed by "Michael K. Banks, CA, Secretary". Today, a curious second e-mail came out with the subject line "Legal Notice - Official Call for ICAO Council Election Nominations". I didn't pay close attention to it, with a busy day not giving me a lot of time to look careful - but it really seemed odd they repeated the notice a second time. That same friend, being a good auditor, took a good look at the second e-mail and noted the enhancement: the second invite is signed by "Michael K. Banks, CPA, CA, Secretary". I wonder whether someone within the ICAO quickly noticed the missing "new" CPA designation, or whether this was in response to someone outside the Institute calling them out on the oversight? I'm guessing an insider called them out on the mistake - a silly little oversight, though...
We paid $300,000 for KPMG to tell us to stop putting flouride in the water, and find other '5% savings.' Wow.
The newest gem to land in Toronto's lap is a report on where services can be cut back to save money - you can read the report yourself here - the city has kindly posted the PDF for all to see . According to NOW Magazine, the report cost $300,000 , which suggests a 1000 hour job if the consultants charged about $300 an hour to do the work. That's just a wild guesstimate, but scale the hours and hourly rate accordingly based on how much work you think it took to put this report together. It's not surprising, if NOW's math is to be correct, that only $15 million of savings has been identified, however, considering the majority of the findings in the report are in the "low" savings category, which means it'll save us 5% or less. Did the consultants correctly identify the risk associated with publishing a report where they were going to draw the ire of everyone from cyclists to dentists? Who angers dentists, seriously ? Candy companies. And global consultancies...
Toronto Police Tactical Retreat Saved Lives, Sacrificed Vehicle: A detailed video analysis of the police car fire at Bay and King on Saturday June 26
This post is an example of where the mindset of the Hardcore CA will take you. In AuditLand and other corporate environments, when something goes Horribly Wrong, rather than point blame and string people up, you have a "Lessons Learned" moment, which can either be a casual debrief, or an exhaustive exercise in identifying what mistakes were made, and how they can be avoided in the future. There will no doubt be some very professional investigations conducted into what happened this weekend at the Toronto G20 riots. One of the most shocking images online and on TV came from the fires that consumed Toronto police cars , which initially engendered some extremely sceptical treatment. After all, they just bought a water cannon - couldn't they handle a fire quickly and safely? This presumed that the security teams knew they may need to use it as a firefighting vehicle; given the delays it's probably safe to assume wasn't planned for. This makes sense, considering its stated...
G20 Saturday: Violent Rumble
I missed out on the madness downtown today. I followed it on my phone, but missed all the live TV footage which no doubt justifiably enraged my friends. I did catch stills like this one which from a local Toronto photographer show why the city was on edge all week long. It's perhaps best I wasn't around - I could've had my camera smacked down to the ground by an imported officer from Peel region. Of course he might've been on edge - not sure if this was before or after one of those police cars was set on fire. The you'll "be on Youtube" response, while accurate, was rather snarky to the point of inviting an assault. Not justifying, of course - this is clearly a criminal offence by a police officer. Also freakish: random arrest videos by plainclothes officers. I should point out that some well-meaning people naively claim that when store windows got smashed in, the "peaceful" protesters should've taken action to stop the anarchists and ne'er...
It's easy to guard downtown Toronto for a simple reason
The most hardcore protesters of the day, June 22: courtesy Toronto Police Service's "LGBT protest on Queen St. W. without incident" album . Photo credit: Kevin Masterman Writer/Photographer for Toronto Police Security guards have a cushy job guarding the lobbies of the big fancy downtown office towers during G20 week. They of course have a solemn duty to make sure anyone getting in the building has a proper security card. I do believe the two gentleman guarding our lobby almost glanced at the card clipped to my belt as I wandered in out of the rain yesterday. If they asked, I would have of course good-naturedly held up my pass for closer inspection. "Yes, it is in fact I, Super Auditor." Or whatever. This is of course unnecessary: since I am able to dress the part of Super Auditor, Defender of Capitalism, or whatever you want to call the productive inhabitants of the downtown core, the hard plastic card I carry with me is almost entirely superfluous - except for...
The G20 police state comes to Toronto: shenanigans!
Globally I'm sure this is still off the radar, but in Canada we're all in a state of shock, having learned that the government plans to spend a billion dollars hosting the G8 and G20 summits this month: the G8 in the rural town of Huntsville, and the G20 in downtown Toronto. $1,000,000,000. Nice. I've seen the first wave of spending allocated to installing more security cameras, presumably temporarily removing the garbage cans downtown and replacing them with transparent bags taped to lamp posts - which just look fabulous in a ghetto chic sort of way - and let's not forget the coup de grace. They're scraping all the posters and political propaganda stickers off the lamp posts as well. I've seen it on my bike rides to work. Heaven forbid Obama learn that Paul Oakenfold had a show at the Koolhaus in March and they didn't invite Barry to check it out. Newspapers are hot on the trail of this unfolding fiasco. The Post asked the ten federal agencies getting this...
Shocker: CA firm lays off staff immediately after the 2009 UFE
My dear readers have reported experiencing something horrible: layoffs immediately after the UFE! Although it's one thing to decide, "we have too many young staff, let's tell some of them not to come into the office on Monday", saying, "well, let's get it over with quickly and call them to the office immedately after they have finished their 13 hour exam." Seriously - calling someone in on a Thursday afternoon to tell them they're being let go? Is that someone's idea of a sick joke? It's marginally better than doing it before the exam itself - that's a cardinal sin which I decry even more loudly, since it throws people off their game for preparing for the exam - but you would think that firms would realize that, "hey, we're doing campus recruiting right now." What does that mean? It means that students across Canada and in other parts of the world are currently applying to work for accounting firms. If students find out that...
What did the Livent fraud teach us about IT audits, frauds, and financial audits in general?
Livent was a Canadian theatre company which imploded in a massive accounting scandal in the 1990's which we learned about in university as a case study in how not to do several things on an audit. The people involved are heading off to prison , at the end of a lengthy and drawn out legal proceeding, but that's okay because I only now noticed this article in Canadian Business shed some light on the IT side of things . During one audit in 1996, computer experts from Deloitte & Touche – the accounting firm that audited Livent’s financial statements – spent at least 28 hours evaluating the company’s information systems, but failed to detect the changes, the court heard. Any inquiries from the auditors about changes were referred to Eckstein, Cheong said. A Deloitte report on Livent’s computer systems, however, noted the company’s lack of data security and warned: “The lack of sufficient logical security may result in unauthorized access to programs or data.” What this article doesn't...
Bad news for KPMG UK staff: mandatory 4-day weeks
KPMG UK made headlines today by announcing it's offering - encouraging? - it's staff to either take a 4-day week or 4 to 12 weeks off at 30% pay - a semi-paid-leave-of-absence. Interestingly, even some top partners are offering to lead by example, including the head of the Bristol UK office . This follows the mandatory vacation that KPMG Canada staff had to take during the past Christmas break. A move like that is extremely important if the firm is serious about this policy for all staff but wants to stave off the idea that Damian Wild suggests , that taking the offer could be a career limiting move. It's definitely true that you need top as well as other senior and middle management to demonstrate that the company is serious about its policy, whatever they're trying to accomplish. In less drastic scenarios, this is also true in the case of flexible work arrangements - either in the case of ultra-temporary working from home arrangements, to actual 60%/80% workloads. If...
BCE sale falling through? Reporters' independence conflicts? Meh?
One of my friends just pointed out this article in the Globe, which explains how the buyout of Bell Canada by one of Canada's largest Teachers' Pension funds is on the verge of falling through completely. A teacher's pension plan buying one of Canada's largest corporations? Yes, our teachers have deep pockets saving for their retirements Of course I'm going to illustrate this post an artsy edit of one of my photos of the BCE Place atrium. I found it interesting to see this paragraph in the article: The helpful little solvency clause, however, became the deal's Achilles heel in recent weeks as financial market carnage sharply lowered solvency thresholds, leaving the company vulnerable to KPMG's stunning decision . I suppose "decision" is one way of describing an auditor's conclusion - unlike the journalist, auditors themselves tend not to think of their conclusions as "decisions" though - that smacks of a subjective call similar to that...
American Automakers: what are you on?
Flying to Washington on three private jets to ask for billions of dollars ? Clever. I feel bad for the workers in the auto industry, but if I was working in that field, I would be planning an exit strategy around now, unless I was in a position to improve things. Especially because the heads of the companies aren't exactly inspiring confidence right now. From the Dana Milbank article: But the executives were not helping their own case. When Rep. Paul Kanjorski (D-Pa.) tried to find out when GM would run out of cash, Wagoner hemmed and hawed until the lawmaker protested that "I don't quite understand what the hell you just told me." When Rep. Ed Perlmutter (D-Colo.) asked about GM's outlook for the quarter, Wagoner informed him that "we don't provide financial guidance in earnings." So it was hard to feel sorry for the executives when Rep. Peter Roskam (R-Ill.), late in the hearing, reminded them again that "the symbolism of the private jet is difficult...
Deloitte joins the rest of the Big Four - staff to receive overtime
I'm not at all surprised that you'll find my site if you Google big four Canada overtime - I already pointed out that three of the big four are paying out overtime to their non-CA staff and seniors . n.b. provincial laws treat CA, CGA, CMA and CPA and students registered to study for those designations as "professionals" ineligible for overtime pay, regardless of rank. Well now it turns out that all of the big four are doing it - Deloitte & Touche has joined the party . A kind reader who worked for Deloitte pointed this out to me - Deloitte's non-CA staff's overtime hours are about to stop being "unpaid". The news isn't that fresh, but this isn't the sort of thing you see on the front page of the newspaper - unless you Googled "deloitte Canada overtime" you might not be aware of it. All the facts for Deloitte are available at the website they setup otplan.ca - a URL which redirects straight to a deloitte.com page . The general details...
While rushing to work this morning, I wondered how they found the London car bomb
It turns out some medics rushing to treat someone at a nightclub noticed a car filling with smoke, Time reports. Savvy bomb-makers know to use cars with tinted windows, I suppose. Seriously - I've seen one photo of the car so far, and you can clearly see from the rear passenger window through the rear window. No tint. It'd be a stretch to think that this stroke of luck would lead government officials to ban all tinted windows in a vain hope for a repeat of this luck. But then again, they banned nail clippers from airplanes. Ridiculous. At least there's a new argument to use on co-workers who believe coming to work in the downtown core is somehow dangerous: some recently arrested plotters were recorded saying that they were justifying their attacks on nightclubs by arguing that they're dens of vice and immorality, therefore they 'deserve it', according to their twisted logic. So clubbing is more dangerous now, terrorism-wise, then going to work. How oddly reassuring...