Economic turmoil, KPMG Roam, MNP branding, etc.
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TORONTO, May 22, 2022 – The most interesting financial news of the past week must have been the free fall of stock markets around the world – and the resilience of the TSX. While markets south of the border have all fallen by double digits, the Canadian market is down only 5% year-to-date and has been in positive territory for the past year. As Gordon Pape (who writes for Canadian Accountant) explained in Thursday’s Globe and Mail: “One sector carries the whole index on its back: energy.
This is echoed by the latest issue of The Real Economy, Canada, the quarterly economic report published by accounting firm RSM Canada, which focuses on the mid-market. According to the report, the materials and energy sectors will drive Canada’s economic growth in 2022. Despite the economic benefits, however, high fuel prices are causing the transition to clean energy to accelerate.
An overheating Canadian economy and global inflationary pressures are forcing the Bank of Canada to raise short-term interest rates and reduce the size of its balance sheet. Rising day-to-day costs and rising mortgage rates are expected to dampen consumer spending and housing market investment, which should dampen growth and temper inflation, according to the RSM report.
Rising interest rates have, however, posed recession risks, as business insolvency filings in Canada rose 33.8% in the first quarter of 2022 compared to the same quarter last year, the strongest year-over-year increase in 31 years, according to records from the Office of the Superintendent of Bankruptcy. While quarterly consumer insolvencies remain below pre-pandemic levels, rising interest rates and inflation could begin to push that number up at a faster pace.
Insolvency is not the only problem small businesses face. Small business owners also face small business tax rules that are among the most complex rules in our entire tax code, according to Allan Lanthier (a contributing Canadian accountant), in an entertaining piece written for the Financial Post. . Lanthier presents the story of “Mary”, a bookseller in Orillia, Ontario, and an encounter with her accountant that turns into a “fiasco”.
We won’t spoil the surprise ending for you, as we now move on to the rest of the Canadian accounting odds and ends from last week.
KPMG Canada employees can now travel wherever they want
As we previously reported, most of the Big Four accounting firms (with one notable exception) are going the extra mile to recruit and retain employees in an extremely tight labor market for CPAs. We now learn that KPMG partners and employees now have the option of working remotely in any Canadian province and in certain foreign countries, thanks to a new program called KPMG Roam.
According to KPMG, employees will be able to work remotely outside their home province for up to eight weeks in a fiscal year, including a maximum of four weeks outside of Canada. Remote work is open to all eligible associates and permanent employees, regardless of seniority. The only problem is that working hours have to overlap with his home office time zone in order to meet customer needs. Theoretically, however, a KPMG could travel abroad and continue to work, with KPMG’s blessing.
MNP dives deeper into stadium branding
For years, local accounting firm MNP LLP was best known in Ontario for its huge logo in left field at the Rogers Center (formerly known as SkyDome), where the Toronto Blue Jays play. Now comes the news that MNP has purchased the branding rights to the Repsol Center stadium in Calgary, which will henceforth be known as the MNP Community & Sport Centre, an iconic aquatic and fitness center that opened in 1983.
It’s a wise move on the part of the Calgary accounting firm. Every year, our friends at Brand Finance send us the latest report on Canada’s 100 Most Valuable Brands. And every year, we look in vain for an accounting firm to make the list. (The Big Four Canadian companies are not included because they are part of larger global networks headquartered in other countries.) MNP always has the best chance, especially with sports brand deals like this one. this.
Caseware changes name and launches Sherlock
Speaking of branding, a global software brand well known to Canadian accountants and auditors made a few announcements last week. Caseware unveiled a new brand last week in Toronto at CwX, the company’s first global annual conference, and launched a new business intelligence tool called Sherlock, “which consolidates data from multiple engagements. and generates powerful insights that can then be leveraged to improve efficiency and accelerate growth.”
Caseware has also released details of a recent study on how industry professionals view themselves. The findings, from interviews with almost 500 accountants and auditors around the world, “suggest that the profession is moving towards more knowledge-based and people-centred work”. According to the study, “accountants, auditors see themselves as creative, curious and adventurous.”
Trudeau requested briefing on unique wealth tax weeks ahead of 2021 election campaign, documents say (Globe and Mail)
Top reasons the CRA may review or audit tax returns (Globe and Mail)
The latest target of the US culture war is corporate environmental and social reporting (National Observer Canada)
Crypto Miners in Canada and the US Want Greater Clarity on Tax Status (Bloomberg Tax)
RCMP discover complex [CSSBF] Fraudulent Scheme Leading to Charges Against Toronto Family (News Release)
Vancouver offshore shell facilitator Fred Sharp has issued a US$52.9 million judgment for fraud (Castanet)
Penticton accountants help raise over $4,000 at annual tax season food drive (Penticton Western News)
Accountancy body faces questions after collecting millions in fines (Financial Times UK)
SEC probe looms over fastest growing companies in auditors (Wall Street Journal)
By Canadian accounting staff.