Indemnification clauses:
Do you know what you’re really agreeing to?
Vol. 40 / No. 2 • SUMMER 2013
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
Embracing
change:
Building the Chartered
Professional Accountant
designation in B.C.
The ‘Bring Your Own Device’
revolution
Team management myths
40069088
Neal Chaudhary, CGA
Partner, Tacit Management Consulting Inc.
See page 24
11
32
38
Vol. 40 / No. 2 • SUMMER 2013
features
16
Building a new professional
accounting body
CPABC will have 34,500 members and
students, making it the second largest
professional body in B.C.
contents
22
24
Indemnification agreements
Reading – and understanding – the fine print
in a contract is an important risk management
strategy
Success is infectious
With a combined interest in accounting and
technology, Neal Chaudhary, CGA, leads one
of Canada’s most respected software selection
firms
28
Hope in hard times
32
Climate Smart program
adds up for accountants
How the CGA-BC Educational Foundation
helped Nathalie Abramovich, CGA, achieve her
dreams
Participating accounting firms see financial
and environmental benefits
views
spotlight
07 taxmatters
Ed Kroft explores the CRA’s
recent tendency to conflate
tax avoidance and tax evasion
05 outlook
retrospective
15 years of outlook covers
27 keepingTabs
CGAs in the news and
members on the move
09 techview
Convergence to a single
platform improves productivity, but can limit your
options
11 periscope
Janice Turner offers solid
advice for managing teams
36 currentAssets
Innovative gadgets, tech
gear and apps
38 snapShots
Photos from CGA-BC events
40 partingShot
14 ethics in focus
Meet Lorrie Sipka, CGA,
Controller of Cupcakes
by Heather & Lori and File
Reviewer for Broadbent
Girard LLP
Evaluating an ethical
dilemma
34 publicpractice
Edifier
Strengthening your skills as
a networker is good for your
career and your business
42 morethanNumbers
Letting the data tell the
story
06 associationnotice
cga-bc board of Governors call for
nominations
The Board is seeking engaged leaders
and strategists who can bring those
attributes to the task of governing the
Association into the future.
Cover photo (and related story photos) by Ron Sangha.
outlook 03
outlook
editor’smessage
2013 executive committee
Chair: Candace Nancke, FCGA
Past-Chair/Treasurer: Cindy Choi, FCGA
First Vice-Chair: David Sale, FCGA
Second Vice-Chair: Brian Friedrich, FCGA
Chief Executive Officer and Secretary: Gordon Ruth, FCGA
executive staff
>
Embracing change: Our cover story
says it all as we continue to evolve
CGA and the other two accounting
bodies into the new Chartered Professional Accountant designation in B.C.
As part of our move to the CPA
designation, the three bodies are
working to unify their respective
organizations. Many member and
international tax evasion and avoidance. We are not sure if Ed’s new
word will make it into the Oxford
dictionary, but we are certain that
you will find his insights interesting
and useful.
Turn a few pages and you’ll see
Alan Salmon’s latest piece. He says
that while computer hardware gets
Building a New Profession
communications services will be
combined in time for the launch of
our new CPA branding campaign in
early September 2013.
Part of that change means that
this issue of Outlook will be our last.
And while we are proud of our accomplishments these past 15 years,
we are now working on preparing
a new magazine, CPABC in Focus. It
will combine the best of all three
legacy body publications and will
become the voice of the accounting
profession in B.C. With a circulation of
about 34,000, it will have the force of
a major publication similar to others
you may be receiving in the mail or
seeing on the newsstand.
In this issue, we have coined a
new word called ‘avoision.’ It’s really
the view of Ed Kroft who devotes
this issue to reviewing the Canada
Revenue Agency’s focus on targeting
all the splashy attention, it’s a quiet
revolution in software that could
have the real effect on our working
habits and productivity.
We also thought you’d enjoy reading two CGA success stories. One is
about CGA Neal Chaudhary, who
has combined technology with accountancy and is writing a David and
Goliath story. The other is a culinary
delight: the story of Lorrie Sipka,
CGA, the controller for Cupcakes by
Heather & Lori. She gives her insights
into social media, cupcakes and
working across provincial boundaries.
We are proud of the issues that we
have brought you over the years. But
rest assured, you will see many more
great articles and features in an even
better publication. So, on behalf of
the Outlook team, it’s not really adieu.
It’s really a hello to a whole new
world of opportunity.
Edward Downing is CGA-BC’s Director of Communications
edowning@cga-bc.org
04 outlook
Chief Executive Officer: Gordon Ruth, FCGA
Director, Administration, HR & IT: Dan Cheetham, CGA
Director of Marketing & Communications:
Edward Downing, MA (Journalism)
Director, Education: W. D. (Bill) Johnson, FCGA
Director of Student Services: Simone Leonard, CGA
Director, Executive and Corporate Affairs: Juliana Laing, BA
Director of Member Services & Public Practice: Pamela Skinner,
BSc, CFP, CGA
outlook staff
Managing Editor: Edward Downing (604) 730-6208
Communications Manager: Patrick Schryburt (604) 730-6238
Communications Officer: David Ferman (604) 730-6206
Production Co-ordinator: Trevor Hargreaves (604) 730-6226
Advertising Co-ordinator: Pardeep Clair (604) 730-6228
Graphic Design:
Core Associates Communication Design Inc.
Regular Contributors:
Ed Kroft, QC, LLB, LLM, CGA (Hon.); Dr. Michael McDonald,
CGA (Hon.); Alan Salmon
advertising
For advertising rates, contact Pardeep Clair at
(604) 730-6228 or visit our website at www.cga-bc.org.
Outlook is the premier way to contact B.C.’s CGAs.
Advertising in Outlook magazine does not indicate an
endorsement of any business, organization, service or
product by CGA-BC.
Outlook is published four times a year by the Certified
General Accountants Association of British Columbia and is
sent to more than 15,000 CGA members and CGA students.
Opinions expressed are not necessarily endorsed by CGA-BC.
Copyright CGA-BC 2013.
articles, enquiries and letters
Articles, enquiries and letters should be sent to Outlook:
CGA-BC, 300-1867 West Broadway, Vancouver, BC, V6J 5L4
(604) 732-1211 or (800) 565-1211
ISSN 1488-2337 Outlook - Certified General Accountants
Association of British Columbia
CGA on the web
Members and students, you can find all of your most
important CGA-BC services online at www.cga-bc.org.
Agreement no. 40069088
Return undeliverable Canadian addresses to:
CGA-BC, 300-1867 West Broadway, Vancouver, BC, V6J 5L4
Printed in Canada
JUNE 2006
for CGAs is as
strong as I’ve
seen – it’s very
hot for candidates
across the board.
There are
opportunities in
A career
DECEMBER 2006
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B I A
APRIL 2007
SEPTEMBER 2006
“The job market
all companies,
whether in
CGAs ride a
wave of
opportunity
and demand
Destination
2010:
Small business
On your mark,
get set,
GO!
Cutting
service, natural
resources or
through the
confusion:
manufacturing.”
in development
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B I A
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B I A
MARCH 2006
VOLUME 34 • NUMBER 1
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B I A
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B I A
VOLUME 33 • NUMBER 4
VOLUME 33 • NUMBER 3
VOLUME 33 • NUMBER 2
VOLUME 33 • NUMBER 1
VOLUME 32 • NUMBER 4
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B I A
DECEMBER 2005
–Sam Dulay,
Financial Recruiter
Join the race to the
executive office.
Professional image survey:
looks forward
High marks
for CGAs
CPD: Meeting the
global standard
CGA-BC’s top 10
students
Reforming
C.Y. Tay, CGA
the PST
7
Vision 2008 –
building the CGA brand
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B I A
JUNE 2007
11 18 20
B.C. budget doesn’t
deliver debt reduction
Donors give big for
Educational Foundation
Member survey
shows satisfaction
6
2005 ethics stats
released
CGA-Canada goes public
with government initiative
Boost your resumé for
management move
DECEMBER 2007
SALMON ON SOFTWARE:
10
Top
on the
• Sage Accpac ERP &
Business Vision 50
• Blue Link Elite
• Microsoft
Dynamics GP,
Dynamics NAV &
Dynamics SL
• SAP Business One
• Adagio Financial Suite &
Operational Suite
• SYSPRO
ETHICS
4
Know Your Stand on
Salary Before You Talk
5
Ethics up close
and personal
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
GLO
Going green is
Making the Grade:
Latest Student Honours
Ethics in Focus: When
Cutting Costs Breaks the Law
ECO-FRIENDLY GADGETS
FOR YOUR OFFICE
BAL
ECO
NOM
IC
MO
TUR
CGAs DISCUSS
THE ECONOMY
SESSIONS
NEWSLETTER
CGA UNVEILS NEW
MARKETING CAMPAIGN
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
my c
lien
face
?
tunity
or
PEP CELEBRATES
MILESTONE
Vol. 37 / No. 2 • 06 / 2010
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
Profiles of 5 exemplary CGAs
g
OUR ANNUAL SOFTWARE REVIEW:
How the top 10
add up
ts
to fa
ce
An interview with author
David Cottle
3 CGAs discuss their
strategies... and success
+ sessions
The CGA-BC student newsletter
Page 17
Top Students Share
Survival Tips
Centennial Means
Time to Celebrate
B.C. Budget Goes
Green
the CGA-BC
student newsletter
5
Founding Thoughts:
What Would John Leslie Say Now?
Where in the World is
the Web Headed?
8 10 25
Boosting Your
Memory
CGA Spreads its Wings
Down Under
40069088
The CGA-BC student newsletter
Page 17
WHO’S READING
YOUR E-MAIL?
CGA MAKING A DIFFERENCE
IN MONGOLIA
TOP CGAs
HONOURED
GADGETS GALORE:
MUST-HAVES FOR CGAS
40069088
40069088
Vol. 36 / No. 3 • 09 / 2009
Vol. 36 / No. 4 • 12 / 2009
Vol. 37 / No. 1 • 04 / 2010
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
ma
my ke
se
lf
isp
e
TECHNOLOGY TOOLS
FOR ACCOUNTANTS
IN MEMORIAM
R. W. (Bill) Caulfield, BA, FCIS, CGA (Hon.)
1949-2010
ind
ns
ch
w ar
w hat ge
or
th I’m
ab
le
Q&A: An interview with CGA-BC's Technology Expert, Jay Caldwell
Saluting
our
volunteers
PLUS: ’09 ACCOUNTING SOFTWARE REVIEW
SHAREHOLDER
OPPRESSION
SESSIONS
NEWSLETTER
SOCIAL MEDIA
TOOLS FOR BUSINESS
BACKUP PLANS
FOR TECHNOLOGY
DISCRIMINATORY
HIRING PRACTICES
TAX MATTERS:
CRA REASSESSMENTS
Game Plans
THE CASE
FOR THE HST
THE FIRM
OF THE FUTURE
2010
TAX PREVIEW
How to surf the social media wave
NEW CERTIFICATE IN
EXECUTIVE LEADERSHIP
WINDOWS 7
REVIEW
CGAs DISCUSS
THE ECONOMY
MEET A FORENSIC
ACCOUNTANT
60 Years of Excellence
Meet the academics who are B.C.’s newest CGAs
PREVIEW OF
OFFICE 2010
60 Years of Excellence
in British Columbia 1951-2011
in British Columbia 1951-2011
5THE
CGAsGREEN
who have
what Our
it takes
ISSUE:
Focus on the Environment
in British Columbia 1951-2011
Our annual review of the latest accounting software
Vol. 38 / No. 1 • SPRING / 2011
Vol. 38 / No. 2 • SUMMER / 2011
Vol. 38 / No. 3 • FALL 2011
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
The causes
of effect
improve client engagement
and profitability
Gadgets Galore:
Must-Haves for CGAs
Vol. 37 / No. 4 • 12 / 2010
Chris Molineux’s public
speaking 101
6 CGAs,
6 stylish,
corporate
looks
Parting shot:
a new feature
Budget 2007
Vol. 37 / No. 3 • 09 / 10 2010
dressing for success
still makes sense
how to manage conflicts
in the workplace
23 24
vol. 35/No.3 • 09/2008
2008
60 Years of Excellence
CGAstyle 14 pages devoted to sartorial splendour
5
Keep your e-mail safe
set
mys
apa
e lf
rt
wi
ser
vice th
The new face of
public practice
DIRECTORS’ LIABILITY
FOR UNPAID TAXES
SESSIONS
NEWSLETTER
3
Mixing it up
with dividends
CGA: The power
within each of us
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
+ sessions
17 29 31 32
40069088
IL:
r
optional
DESTINATION
2010: SURVEY
to a global
standard
of reporting
Parting Shot:
To Everest and Back
Vol. 36 / No. 2 • 06 / 2009
oppo
no longer
GREENING
YOUR OFFICE
Counting
down
4 25 27 32
Kroft on Tax:
2008 Predictions
40069088
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
JUNE
25 28
Computer user group
marks 20 years
The time to
plan is now.
Employers: Don’t miss
fall interview night
Vol. 36 / No. 1 • 04 / 2009
6
Second lien vs.
mezzanine financing
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B I A
g
+
Vol. 35 / No. 4 • 12 / 2008
Vista opens up
Windows
APRIL 2008
mind?
25 28 30
You want a job and
CGAjobs.org wants you
Technology throw down:
HD-DVD vs. Blu-ray
Green Giant Visits B.C.:
Arnie Says He’ll Be Back
5
Inter-provincial
trade agreements
What’s on their
THE OLYMPICS, TAXES and
6 17 28
All Aboard: Nomination
Package Now Available
24 28
Insight into new research
award for students
VOLUME 35 • NUMBER 2
THE 2007
WHAT BUSINESS THINKS ABOUT THE
CGA-BC ABOUT
WHAT
BUSINESS THINKS
OLYMPICS, GOING GREEN AND
TAXES
Member Survey
The Road Best Travelled.
AG Not Satisfied With
International Efforts
Meet the new Director
of Member Services
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B IA
OCTOBER 2007
We lift
the wrapper
7
Microsoft rearranges
its Office
Conference 2006:
Success by Nature
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B I A
A P U B L I C AT I O N O F T H E C E R T I F I E D G E N E R A L A C C O U N TA N T S A S S O C I AT I O N O F B R I T I S H C O L U M B I A
5
7 24 28
Get on board with 2007
nomination package
VOLUME 35 • NUMBER 1
9 28
‘Phishing’ for your
dollars
VOLUME 34 • NUMBER 4
VOLUME 34 • NUMBER 2
SOX north of
the 49th
VOLUME 34 • NUMBER 3
3 6
Supreme Court
rules
Sustainable:
by all
accounts
CGA-BC announces
new Chief Executive Officer
Gordon Ruth, FCGA
The latest in accounting
sofftware
David Ma
aisster on how to
grow your business
The socialized
professional
Sustainable:
How some of B.C.’s leading companies
and organizations are building a culture
of sustainability
all
6 by
CGAs,
accounts
Cap and
trade
in B.C.
6 stylish,
Lean is
green
corporate
The dawn
of a new age
looks
A step-by-step plan to launch your
social media presence
Rules of engagement
Strategies for implementing social media
Jason Trefanenko, CGA
Heather Maclean, CGA student
Surviving the leap
THE CASE FOR THE
HST
CGAstyle
CGA-BC solicits expert opinions on the benefits
of keeping the Harmonized Sales Tax in place
> Meet six CGAs with a
winning image for fall
> Fall fashion report
> Casual Fridays: What is
appropriate for the office
One CGA’s foray into social media
60 years young!
40069088
40069088
40069088
40069088
Celebrating CGA-BC’s Diamond
Anniversary
40069088
40069088
60 Years of Excellence
in British Columbia 1951-2011
Meet Laura Friedrich: A CGA with focus and ambition
Tax Matters: What would you do if you found
Vol. 38 / No. 4 • WINTER 2011
Vol. 39 / No. 1 • SPRING 2012
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
Your new life strategy: Have more fun!
Vol. 39 / No. 2 • SUMMER 2012
>
Ca-
on the street?
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
> CGA-BC’s first
Executive Director
Spring fashion:
What’s in style
explains why just a quarter-inch
can make such a difference
> Global BC’s
Steve Darling is
u-
CGAstyle
What to expect for the
Canadian economy
40069088
Learning from the
“Australia experience”
Marion Tennant, CGA, CIM
Asset allocation for
turbulent times
> Special Focus
Succession
Planning
> Meet sixgoing
CGAs with
a
green
winning image for fall
Tips
onreport
running
> Fall
fashion
>
your own firm
> Anthony Ariganello, FCGA, to
> Casual Fridays: What is
appropriate for the office
chair provincial audit council
Alan Salmon’s Software Review – A CGA-BC Exclusive
Matthew’s story: A CGA’s struggle to overcome adversity
Vol. 39 / No. 3 • FALL 2012
Vol. 39 / No. 4 • WINTER 2012
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
40069088
Alexandra Korneshuk, CGA student
See page 44
Ultra CGA
Why one member is racing
to make a difference
get on the same page!
Coyne, Hébert and Hanomansing
headline Conference 2013
Guardians of governance:
Essential Tax Planning
Information for 2013
the role CGAs must play
Before you
even say a word...
Windows 8
Three Myths about
Retirement
Reviewing the Pros and Cons
take this expert’s
public speaking advice
Terry Craig, CGA
See page 24
Gazing into
Canada’s
Political
Crystal Ball:
A report on gender equity in
the accounting profession
Partners,
40069088
A PUBLICATION OF THE CERTIFIED GENERAL ACCOUNTANTS ASSOCIATION OF BRITISH COLUMBIA
The Glass
Ceiling
CGA-BC’s 2012 Award Winners
Susan Payment, CGA
40069088
Are we at a technology crossroads? A glimpse of the future ahead
Vol. 40 / No. 1 • SPRING 2013
40069088
Beth McInnis, CGA
Assistant Director/Chief Financial Officer,
Vancouver Art Gallery. See page 26.
Eric Gounder, CGA
Controller, Vancouver Canadians.
See page 26
40069088
Outlook: A retrospective
E
very three months for
more than 15 years,
Outlook magazine has
faithfully been delivered
to more than 15,000 mailboxes
from Victoria to Fort Nelson and
Cranbrook to Prince Rupert, and
many places in between.
During that time, the magazine
has covered significant events,
like the 2008 credit crisis, and
advocated positions on public
policy matters, such as the HST.
It has provided readers with
exclusives such as Canada’s only
annual accounting software
review, and raised the level of
public debate on important
issues such as sustainability and
environmental accounting. It has
profiled countless CGAs with interesting personal and professional
accomplishments, and captured
snapshots of the spirit and energy
of the Association’s many remarkable events.
As the writers, designers, and
editors of CGA-BC’s flagship publication, we have always sought to
inform, to educate, to enlighten
and to amuse CGAs and CGA students in British Columbia. While we
must defer to you, our loyal readers,
to determine how artfully we have
achieved those objectives, please
know that it has always been our
pleasure and privilege to publish
this magazine for you.
The Outlook team
outlook 05
associationnotice
Leading during times of change, challenge and strategic opportunity requires
experience and vision. The Board is seeking engaged leaders and strategists who can
bring those attributes to the task of governing the Association into the future.
Call for nominations
cga-bc board of Governors
1
2
3
4
5
There are seven vacancies on the CGA-BC Board of Governors for 2014
Four are in the Lower Mainland Region (District 1)
One is in the Upper Vancouver Island Region (District 3)
One is in the Kamloops/Okanagan Region (District 4)
One is in the Northern Central Region (District 6)
For terms of three years each
For a term of two years
For a term of three years
For a term of two years
Each candidate MUST reside in the electoral district for which he or she is nominated.
THE ROLE
CGA-BC’s Board of Governors is central to the effectiveness of the Association. Serving on the Board is a
significant responsibility, which entails the following:
• Protecting the public interest and serving as an
ambassador for the profession;
• Preparing for, attending, and actively participating
in all meetings of the Board, as well as any related
committees, task forces or other working groups;
and
• Acting in the best interests of all CGA members
and students and acting in the common interest
of the accounting profession.
THE CANDIDATE PROFILE
In the coming years, CGA-BC will encounter some
defining challenges as we deliver on the opportunities resulting from unification of the profession. The
Association is seeking candidates whose professional experience and personal attributes make
them uniquely qualified to serve as governors of the
Association. Candidates are expected to have the
following qualifications:
• A proven record of leadership and success in
business, government, public practice or the
06 outlook
education sector, with an understanding of a
range of issues facing the profession;
• Personal integrity and a commitment to
protecting the public interest;
• A high-level understanding of organizational
change management;
• Experience in advocacy, policy development or
negotiations;
• Ability to contribute to and adopt a shared
vision for the profession going forward; and
• A desire to build on the strengths of the
Association and the CGA designation to advance
the CPA designation and the accounting
profession in B.C.
Governance expertise and experience is not
essential, but is considered an important asset.
THE REWARDS
By serving on the Board of Governors you will play
a role in the stewardship of an organization at an
important time in the evolution of the profession, as
CGA transitions towards CPA. You will have first-hand
exposure to the issues and challenges facing CGABC and the new CPA organization, both provincially
and nationally.
6
7
Are you or someone
you know qualified
to serve on the
Association’s Board
of Governors?
NOMINATION FORMS
Nomination forms are
available to members in the
following ways:
1. On the website at
www.cga-bc.org.
Click on the Nomination
Package icon on the
home page.
2. CGA-BC will email a link
to the nomination form
in PDF format to all
members whose email
addresses are registered
with the Association.
NOMINATION DEADLINE
In accordance with the
Bylaws, nomination forms
must be submitted to the
Secretary no later than
4:30 p.m. on Thursday,
August 1, 2013.
Ed Kroft, QC, LLB, LLM, CGA (Hon.)
taxmatters
Background: The May 8
Press Release
On May 8, 2013, the federal
government announced a
$30 million investment over
five years for the Canada Revenue Agency (CRA) to target
international tax evasion and
tax avoidance. As stated in
the press release, the money
includes:
• New resources of $15 million through Economic Action Plan 2013 to establish
the necessary systems for
the CRA to receive reports
seeking to hide money or
assets offshore.
Measures announced
in the 2013 Federal Budget
include:
• Launching a new Stop
International Tax Evasion
Program that will allow
the CRA to pay individuals
with knowledge of major
international tax noncompliance a percentage
of federal tax collected as
a result of the information
provided;
• Requiring financial institutions and others who
“We all know that
tax evasion is a
crime that is punishable by a fine
and possibly jail.
Yet tax avoidance
has never been a
crime: it is lawful and permitted
by the Canadian
International tax evasion and tax avoidance
are not the same
Income Tax Act.”
The tax avoision conundrum
from banks and other
financial intermediaries
on international electronic
funds transfers of $10,000
or more; and
• An additional $15 million
in reallocated CRA funds
that will be used to bring
in new audit and compliance resources dedicated
exclusively to international
compliance issues and revenue collection identified
as a result of measures outlined in Economic Action
Plan 2013.
To ensure that these activities move forward quickly, a
dedicated team of CRA
experts will be created. This
new team will be responsible
for the implementation of
the international tax evasion
and aggressive tax avoidance measures announced in
Economic Action Plan 2013. It
will ensure that the full force
of the agency’s international
compliance and auditing
resources are brought to bear
on individuals or businesses
currently report information on international
electronic funds transfers
greater than $10,000 to the
Financial Transactions and
Reports Analysis Centre of
Canada (FINTRAC) to also
report those transactions
to the CRA; and
• Introducing additional
requirements for Canadian
taxpayers with foreign
income or properties to
report more detailed information, and extending the
amount of time the CRA
has to reassess those who
have not properly reported
this income.
The Concern: The
Verification of Tax
Avoision?
The press release contains
the following comment: “Our
Government is providing the
CRA with further resources
to ensure our tax system remains fair for Canadians who
work hard and play by the
Ed Kroft, QC, LLB, LLM,
CGA (Hon.), is a partner
with Blake, Cassels &
Graydon LLP. He is a
member of the firm’s Tax
Group and leader of its
Tax Controversy & Litigation Group.
rules. These new measures
will provide additional
tools to combat international tax evasion and
aggressive tax avoidance,
and improve the integrity
of the tax system.”
Since when are tax
avoidance and tax evasion to be mentioned
together? We all know
that tax evasion is a crime
that is punishable by a
fine and possibly jail. Yet
tax avoidance has never
been a crime: it is lawful
and permitted by the
Canadian Income Tax Act
(ITA) and people can plan
their affairs to minimize
taxes payable. Only specific
anti-avoidance rules and
the general anti-avoidance
rule might deny anticipated tax benefits that may
result in taxes, interest and
possibly penalties.
It is true that the ITA has
changed over the last 38
years since I first studied
it. It is thicker, the print
is smaller and the rules
are jammed on a page in
double columns. However,
to borrow a line from the
1967 movie Cool Hand
Luke, “what we have got
here is failure to communicate.”
I do not remember the
word “aggressive” being
mentioned in the ITA. I do
not even know what the
adjective means in the
context of “tax avoidance.”
The CRA indicates that
aggressive tax avoidance
refers to avoidance where
there has been compliance
with the letter of the law
but not the object and
spirit of the law. In any
event, I surely do not recall
jail or fines being associated with tax avoidance.
So what we seem to be
seeing is a blurring of the
outlook 07
verification and enforcement efforts relating to
avoidance and evasion
– maybe we can call the
target of the new CRA efforts tax avoision.
What are the implications if the concepts are
blurred? Does the public
care? Do the voters care?
In May 2013, the Standing
Committee on Finance
released a report on Tax
Evasion and the Use of Tax
Havens. Although the
report incudes “tax evasion”
in its title, it speaks of tax
avoidance and tax evasion
in a coordinated way even
though the report also
acknowledges that witnesses before the Committee highlighted differences
between the two.
What is also disconcerting is that international
rhetoric about the activities
of taxpayers seems to be
drifting beyond just conflating tax evasion and tax
avoidance. There have been
cries in the UK that people
and corporations should
pay their “fair” share of tax
even if not legally obliged
to do so. Moreover, it seems
that the notion of morality
may even be creeping into
dialogue about the calculation of taxes, notwithstanding that the Federal Court
of Appeal, in the Canadian
Imperial Bank of Commerce
decision 2013 FCA 122,
stated the following:
“In quantifying a taxpayer’s tax liability under
the Income Tax Act, R.S.C.
1985, c. 1 (5th Supp.), is it
ever necessary to evaluate the morality of the
taxpayer’s conduct? As
a matter of general principle, the answer should
be no. The Income Tax
Act is intended to raise
revenue for the use of
08 outlook
the federal government.
It also contains provisions
intended to facilitate
the distribution of social
benefits according to
standards established by
Parliament, or to encourage or discourage certain
industries or commercial
practices in the public
interest as perceived by
Parliament from time to
time. But nothing in the
Income Tax Act expressly
permits or requires the
Minister of National
Revenue, or the Courts,
to apply the Income Tax
Act differently depending
upon the morality of the
taxpayer’s conduct.”
If there is a blurring of
the distinction between tax
avoidance and tax evasion,
how will the whistleblower
program operate with
respect to international tax
non-compliance? We are
awaiting details from the
CRA on this topic. Yet, when
one reads the press releases
on the CRA website, one
might assume that CRA
will be seeking info from
whistleblowers in a wide
variety of situations.
Canada is not the only
country trying to clamp
down on those seeking to
dodge their tax obligations.
Globalization has been
fuelled by the easy movement of people and money
across borders and, combined with the growth of
offshore accounts and the
easy access to international
tax havens, this has made
international tax evasion a
focus for tax officials around
the world.
Under the CRA’s
leadership, Canada has
established a promising
framework to help combat
this growing problem. With
90 tax treaties in effect
“If there is a blurring of the distinction between tax
avoidance and tax
evasion, how will
the whistleblower
program operate
with respect to
international tax
non-compliance?”
and several more under
negotiation, Canadian
tax officials are in a much
better position to share
and obtain information
with other jurisdictions.
The CRA has also committed important resources to
this cause, including hiring
additional auditors. To
date, their efforts are paying off and we are seeing
some positive results.
To illustrate this point,
the CRA notes that:
• Since 2006, it has
audited 7,761 cases of
offshore aggressive tax
planning and identified
approximately $4.58
billion in associated
unpaid tax.
• During the same period,
it has completed compliance actions on 340
audit cases of high-networth groups who were
using sophisticated
business structures and
offshore arrangements
to avoid taxes, and identified over $195 million
in unpaid federal taxes.
Through collaboration
with an international
partner, the CRA identified 106 taxpayers with
potential unreported
income and reassessed
over $22 million in unpaid taxes, interest and
penalties.
As these results demonstrate, the government
should be commended for
its efforts – and success –
in combating tax evasion
at home and abroad.
Nevertheless, taxpayers
and their tax advisors
should rightfully be vigilant against any potential
government overreach
or abuse of power on the
part of our tax officials as
the new measures take
effect.
Alan Salmon and Brian Tankersley
techview
T
he technology
industry is going
through a period of
disruptive change.
While 2013 promises to be
a big year from a computer
hardware perspective – with
new Ultrabooks, tablets and
phones entering the market –
the real news for 2013 will be
in software. The basic building
blocks of software, operating
systems, have been quietly
going through a metamorphosis during the past few
years. The results of these
changes will positively affect
While most businesses have
standardized on Microsoft
Windows in the last two decades, three main platforms
are currently evolving: Windows 8/Microsoft, iOS/Apple
and Android/Google.
Software applications
are changing too. Access to
software through hosting
or software as a service is
leading some businesses to a
simpler configuration of their
in-house computers. In other
cases, the system requirements have become so
complex that it is rare that a
“The big news in
technology is the
seismic shift in
operating system
convergence to a
single platform.”
The move to a single platform limits choice but improves
productivity
Technology trends
our working style and capabilities this year and beyond.
The Big Shifts
What are the major changes
we’re witnessing? Simply put:
• hardware is changing,
• operating systems are
changing into platforms,
• applications are changing to support mobility,
web and ease of use, and
• the backbone and infrastructure that supports
all of our computing
is changing, including
virtualization, backup,
private and public clouds,
software as a service and
hosting.
We’ve all noticed the shifts
in the size and speed of
end-user computer hardware
and phablets (a combination
phone/tablet), leading to the
Bring Your Own Device revolution. The system software
that runs these devices is
converging and your choice
of platform determines many
of your options or choices.
single IT professional can install and maintain a complete
system. Instead, businesses
are choosing to outsource
their IT operations so they are
operated remotely. Ultimately, businesses should pick an
end-user computer hardware
strategy that fits their needs:
it is clear that computer
hardware platforms matter
less today than they did five
years ago.
But the Big News?
The big news in technology
is the seismic shift in operating system convergence
to a single platform. Think
Windows 8, iOS/Mountain
Lion or Android Ice Cream
Sandwich on phablets and
computers. These three
platforms are designed so
that the same operating
system, or one that looks and
operates in a similar fashion,
runs on your phone, tablet
and computer. When you buy
into a platform, the way applications integrate and work
Alan Salmon is a leading authority on accounting technology. He is the
Managing Director of K2E
Canada Inc., a North American consulting firm providing technology training to
accountants. In addition to
his work with consultants,
accountants and software
companies in both Canada
and the U.S., he is the
chairperson of the Accounting Technology seminar
series. He can be reached
by email at alan@k2e.ca or
by visiting www.k2e.ca.
Brian Tankersley, CPA,
CITP, is the Technical Editor
of the CPA Practice Advisor
(CPAPracticeAdvisor.com)
and is an associate with K2
Enterprises (www.k2e.com).
He can be reached at
brian@k2e.com.
together is largely controlled
by the vendor.
As you can guess, this is
a fight between Microsoft,
Apple and Google. Some
of the fight is controlled
by intellectual property,
patents and lawsuits, some is
controlled by innovation and
ease of use and some is controlled by application availability. A future that allows
applications to seamlessly
run between a phone, tablet
and computer is very attractive as long as the application
behaves appropriately on the
different devices. Even more
attractive would be a future
that allowed applications
to run on any platform and
seamlessly work together.
I have been testing a
Windows Phone 8X by HTC
because I wanted to see how
the Windows phone environment worked in conjunction
with my Windows Surface
tablet and my Windows 8
computer. For sure, I say
wow! This is the way of the
future.
While these technologies
are far from perfect, and
the Windows 8 phone and
the Windows Surface tablet
may not quite be ready for
the mass market, I’m able to
do key tasks quicker on my
Windows phone than I could
on my iPhone. Data is seamlessly shared between the
Windows Phone, Windows
Surface and Windows 8.
The choice of platform has
made my work processes
easier. Even though the
Apple iPhone was more elegant and simple, it is easier
to run Windows everywhere.
As an additional point, with
my MacBook Air 2, iPad and
iPhone, I did not have nearly
the same level of integration
that is possible with Windows
8. The same situation is true
with a Google Chromebook,
outlook 09
>
Surface Tablet
Google Nexus 7 and Motorola Android phone. Again
nowhere near the integration
you get with Windows 8.
Platform limits choice
while enabling ease of use. If
we choose a particular vendor, we get the most benefits
and the most restrictions
by adhering to the vendor’s
rules. Think of iCloud and
iTunes as enabling your abil-
ity to shop easily, yet
restricting your choice
to what is in the Apple
Store. Microsoft and
Google are trying to
mimic this model. Is
a single supplier in
your business’s best
interest? Some say
yes, while others say
best of breed supports their
strategy most effectively.
Some of our greatest frustrations come from hardware
failures, inconsistent results
or confusing design. Platform
will minimize the differences between hardware
run within the family. Each
device will work in a similar
fashion. Most of us could care
less what the hardware or
software is or whose brand is
on it as long as it runs reliably
100 per cent of the time and
helps us get our job done.
Platform will help us build
our ideal future. Consider
your platform choice and
your providers carefully to
get the best results for your
business.
Conclusion
This is a big year for technology change. Businesses
today face key decisions on
what hardware and what
software they are going to
embrace. Those decisions
should be made carefully
as your platform choice will
have a big impact on your
productivity.
Blair Mackay Mynett
Valuations Inc.
is the leading independent business
valuation and litigation support practice
in British Columbia. Our practice focus
i s o n busi ne ss valu atio n s, m e rge rs
and acquisitions, economic loss claims,
forensic accounting and other litigation
accounting matters. We can be part
of your team, providing you with the
experience your clients require.
Suite 1100
1177 West Hastings Street
Vancouver, BC, V6E 4T5
Telephone: 604.687.4544
Facsimile: 604.687.4577
www.bmmvaluations.com
10 outlook
Left to Right:
Vern Bla i r, Cheryl Shearer, Rober t D. Mackay,
Kiu Ghanavizchian, Chad Rutquist,
Gary M. W. Mynett, Chris Halsey-Brandt,
Andy Shaw, Jeff P. Matthews, Farida Sukhia
Janice Turner
periscope
R
oy Johnson’s best day
is most people’s worst
day. But what else
would you expect
from a professional problemsolver who brings workplace
clashes back from the brink?
The Vancouver-based
mediator, psychotherapist and
trainer recently led a two-day
professional development
seminar on practical tools for
managers. Johnson is also a
member of CGA-BC’s Leadership Program faculty.
In his more than 15 years
of resolving interpersonal
within days you realize that the
one perpetually tardy team
member figures she can keep
arriving late because, hey, she’s
not the only one! Constructive? Not really.
Email, Johnson advises,
is best used to confirm the
outcome of a conversation.
It is not the place to have
the conversation. Moreover,
when people are confused or
unpleasantly surprised, their
natural instinct is to assume
negative intent. As a rule, use
individual communication
processes for individual issues
Tips to help you engage your staff
So, you want to manage a team?
disputes, the self-described
bully whisperer says he’s pretty
much heard it all. And at the
heart of most conflicts is – you
guessed it – poor communication.
Take email. Email has the
illusion of being efficient,
Johnson warns. Unfortunately,
because it’s so convenient
and irresistible, it can cause a
whole lot of miscommunication. Example: you want to
let an employee know that
it’s important to keep regular
business hours and figure all
your staff could benefit from a
reminder, so you fire off a team
email. Done!
The unintended result is
that several of your employees
take exception to the email
knowing full well which staffer
is chronically late. They’re not
just perplexed but outright
defensive, and they want to
know why they were included.
You end up spending a good
chunk of time smoothing
things over with the miffed
employees. Not only that,
and group processes for group
issues. That may sound like
common sense, but common
sense is actually not particularly common, Johnson notes.
Another minefield for
managers is feedback. Praise
or criticism should be specific,
meaningful and timely. And
as a manager it’s up to you to
ask your employees how they
want to be acknowledged.
When delivering criticism, privacy is paramount and the focus should be on the person’s
behaviour, not personality. Also
keep in mind that up to 93 per
cent of what we communicate
“Managers who
know how their
employees work
– their strengths
and motivators –
will do better at
engaging them.”
is conveyed through our body
language and tone – with as
little as seven per cent through
our words.
Know your employees’
strengths and motivators
It’s also important that managers understand the various
working styles of their staff.
While most employees are a
blend of a couple of styles,
they are likely to be dominant
in one of four styles: analytical,
driver, amiable or expressive.
Managers who know how
their employees work – their
strengths and motivators – will
do better at engaging them.
Consider that the analytical employee likes facts and
figures, focuses on steps and
objectives, and seeks logical
explanations to do the job
correctly. The employee with
a driver style likes results and
focuses on getting the job
done in the most efficient way.
The amiable-style employee
works cooperatively, focuses
on the process and seeks
informality. And the employee
with an expressive style works
enthusiastically, has vision and
seeks stimulation.
When it comes to motivating employees, try to ensure
that their challenges and
responsibilities match their skill
sets. When they don’t match,
the person can become bored
or, conversely, overwhelmed.
Drawing on the work of
renowned psychologist Mihaly
Csikszentmihalyi, Johnson
says managers can help guide
workers into the so-called flow
channel (also known as being
in the zone), where the task
and the person’s skills are in
near-perfect balance. According to Csikszentmihalyi, flow
relies on several conditions
being met, among them: goals
are clear, feedback is immediate, there’s a balance between
opportunity and ability, and
outlook 11
Seven Great Management Myths
Myth: A manager’s key challenge is to keep the department in working order.
Reality: The key challenge is not just to ensure the smooth operation of the department,
but to make changes that will enhance the team’s performance.
concentration deepens.
Managers can also benefit
from strong communication skills that include active
listening techniques such
as paraphrasing, reflecting, open questioning and
summarizing. In short, your
employees will want to be
assured that their concerns
are being heard. Note to
leaders who aim to have the
last word: do you want to be
“right” or do you want to be
effective?
Janice Turner is Senior
Communications Advisor
for the Certified General
Accountants Association of
Canada.
Myth: Managers should focus on individuals.
Reality: Effective managers lead their teams like a conductor leads an orchestra, balancing
some one-on-one focus with a focus on how the team is working together.
Myth: Rules must be enforced and subordinates must comply.
Reality: The goal should be commitment and engagement, not just compliance.
Myth: Once you are a leader, you can implement more of your own ideas.
Reality: The source of a leader’s true power is in the willingness of others to be led by you.
Myth: A leader must always be empathetic.
Reality: Effective leadership requires healthy detachment. Being overly empathetic can lead
to burn out.
Myth: A leader must always be strong.
Reality: Effective leaders strategically reveal their humanity.
Myth: Courage is a talent few leaders possess.
Reality: Courage is persistence, only five minutes longer.
Source: The Neutral Zone Coaching and Consulting Services; www.theneutralzone.ca
Mertens
MertensValuation
ValuationServices
ServicesLtd.
Ltd.
Independent
Independent
Expert
Expert
Advice
Advice
Rick
Rick
Mertens
Mertens
hashas
been
been
assisting
assisting
fellow
fellow
CGAs
CGAs
and
and
their
their
clients
clients
with
with
independent
independent
business
business
valuation
valuation
and
and
related
related
services
services
forfor
thethe
past
past
1010
years.
years.
Rick
Rick
is located
is located
in the
in the
Greater
Greater
Vancouver
Vancouver
area
area
butbut
regularly
regularly
works
works
with
with
clients
clients
located
located
throughout
throughout
British
British
Columbia.
Columbia.
Rick
Rick
is committed
is committed
to providing
to providing
high
high
quality
quality
service
service
in in
a personalized,
a personalized,
timely
timely
and
and
cost
cost
effective
effective
manner.
manner.
HeHe
hashas
extensive
extensive
experience
experience
in business
in business
valuations,
valuations,
economic
economic
loss
loss
claims
claims
and
and
transaction
transaction
advisory.
advisory.
In addition
In addition
to his
to his
CBV
CBV
and
and
CGA
CGA
designations,
designations,
Rick
Rick
hashas
also
also
completed
completed
thethe
3-Year
3-Year
In-Depth
In-Depth
TaxTax
Program
Program
of the
of the
CICA
CICA
and
and
other
other
specialized
specialized
courses,
courses,
and
and
cancan
assist
assist
with
with
various
various
planning
planning
matters.
matters.
| Litigation
| Litigation
| Transaction
| Transaction
Business
Business
Valuation
Valuation
Support
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Advisory
Advisory
Rick
Rick
Mertens,
Mertens,
CBV,
CBV,
CGA
CGA
#2300
#2300
– 2850
– 2850
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Shaughnessy
Street
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Port
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Coquitlam,
Coquitlam,
BC,BC,
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604-518-7551
604-518-7551
| rick@mertensvaluation.com
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www.mertensvaluation.com
12 outlook
ethics in
By Michael McDonald, PhD, CGA (Hon.)
THE DILEMMA:
Karl Lunstadt, CGA, and Annie Plume,
CGA, have been the only accountants providing services in a small
town that is growing rapidly due to
recent resource development. While
working independently, they have
been friends for several years. They
recently heard that another accountant, Oscar Lumino, CGA, is planning
to offer general accounting services
in the same town. They both agree
that with the recent resource boom
there could potentially be enough
work for three accountants. However,
they have heard rumours that the
new arrival may offer cut-rate pricing
that will detract from their client
base. Karl suggests to Annie that they
both have a quiet word with Oscar
about “appropriate” fee levels.
Responses
Two CGAs, Howard Teasley and Will Martin, provided informative responses to this dilemma.
Both said that it would be unethical and illegal
to meet with the new accountant in town to
discuss “appropriate” fee levels. Martin cited a
number of sections of the Code of Ethical Principles and Rules of Conduct (CEPROC) in framing
his response, including responsibilities to
society, trust and duties, practice of the profession and responsibilities to the profession. Key
among the rules cited by Martin is Rule R501
Unfair Methods of Competition, which explicitly
includes “price-fixing” as a prohibited activity.
Martin said, “The act of price fixing certainly
violates Canadian legislation, specifically, the
Competition Act, hence, an unlawful activity
under Rule R102.” Teasley also noted that most
professions have similar rules to promote
competition except for fields such as medicine
where a fee schedule is negotiated with a common insurer.
How should Annie respond?
Annie’s Options
Given that having a discussion of “appropriate
fee levels” with the new accountant would be
unethical and illegal, Annie should not agree
to the meeting proposed by Karl. But simple
refusal is not sufficient. Martin insightfully
noted that:
“If Karl acts as he’s suggesting, with or
without Annie’s participation, she then has
14 outlook
responsibilities under CEPROC to inform
him and report the action. Neither removing
herself from the issue (by not responding),
nor a direct refusal to join in the activity will
absolve Annie of these responsibilities. Given
the knowledge that Karl intends to speak
with Oscar, she must then consider the
duties of care to the profession, its members, and the public. Doing nothing is not a
reasonable option in the circumstance.”
Hence, as a professional colleague, Annie has
a responsibility to remind Karl of his responsibilities under CEPROC. This can be done with
sensitivity by, for example, asking him how
accounting clients would feel if they knew
that local accountants had agreed to set fees
(a “what if affected stakeholders knew” test for
unethical behaviour) or how he would feel if
other professionals in town did the same thing
(the golden rule test).
It would be fair for Annie to remind Karl that
if the new accountant Oscar offers what are in
effect “cut-rate services” (i.e., services that fall below the professional standard), he must comply
with Rule R506 on Fees:
A Member or Firm engaged in the Practice of
Public Accounting shall establish a fee structure and shall ensure that a fee quoted and/
or charged to a Client for the performance of
Professional Services is sufficient in that:
(a) independence, where required, will not
focus
be impaired;
(b) qualified members of the Firm will
be assigned to the engagement and will
devote appropriate time to it; and
(c) the quality of work will not be impaired and that due care will be applied
to comply with all applicable professional
standards, guidelines and quality control
procedures in the performance of those
services.
Hence, if the new accountant in town, Oscar
Lumino, provides services that appear to
violate Rule R506, then Annie and Karl would
have grounds for complaining to CGA-BC
provided that they had previously presented
their criticisms to Oscar (Rule R105). In summary, Rule R501 prohibits collusion to fix fees,
while Rule R506 says that fees must be set at
a level to provide quality services to clients.
Professions as Business
While accounting firms have to be run in
Michael McDonald is Professor Emeritus
of Applied Ethics at the W. Maurice Young
Centre for Applied Ethics at the University
of British Columbia. In 2006, McDonald
received an Honorary CGA for his extensive work in accounting ethics education.
a business-like way to survive and prosper,
first and foremost they have to be run in the
professional manner described in Rule R506
and the rest of CEPROC. If accounting were
just another business, there would be no
need for the regulatory oversight established
under provincial law for the various accounting associations. It could be left to market
demand, backed up by commercial law, to
determine winners and losers in the business
of accounting. But like medicine and law,
accounting is a profession so it is not just the
market that determines success or failure.
What makes medicine, law and accounting
professions? The answer is that the public
interest is at stake. In market relations the
standard assumption is that people are generally able to look after their own interests. In
areas of professional activity, the complexity
of the matters at hand (health for medicine,
justice for law and financial information for
accounting) means that clients and affected
third parties can be at a disadvantage. Hence,
a relationship of fiduciary responsibility
provided by professionalization is needed to
protect the client’s and public’s interest.
Finally, if Annie and Karl feel that the fees
they are charging are reasonable for the level
of professional services they are providing,
they should remain confident that most, if
not all, of their clients will recognize this with
their continued loyalty.
The Next Dilemma
Nell Fong, CGA, is the assistant to
the Chief Operating Officer (COO) at
Diameter Forest Products, a privately
held company that is the main employer in northern B.C. Diameter has
been having financial difficulties. The
COO has just handed Nell a confidential list of employees who are going
to be let go at the end of the summer
after the current production run is
completed. Nell is to prepare severance packages for these employees.
Much to her dismay, Nell sees that
her sister-in-law Ginny is going to be
let go along with 100 other employees. Ginny has developmental disabilities and is a single mother with
two children. Nell thinks that if Ginny
were given a “quiet heads up”, she
would likely be able to find a new job
in their town right now. However, if
Ginny does not find out about her job
loss until the fall she is less likely to
be competitive for a new job with the
other recently laid-off workers.
What would you advise Nell to do?
Email edowning@cga-bc.org with
suggested solutions to this issue’s
ethics dilemma, as well as suggestions for new cases.
outlook 15
COVER
>
First row from left to right: Pat Kennedy, FCMA, Chair of CMA BC Board; Gordon
Holloway, FCA, President of ICABC Council; and Candace Nancke, FCGA, Chair of CGA-BC
Board. Second row from left to right: Vinetta Peek, CMA (Hon.), CMA, President & CEO of
CMA BC; Richard Rees, FCA, CEO of ICABC; and Gordon Ruth, FCGA, CEO of CGA-BC.
Building
a new
professional
accounting
body
B.C.’s accounting profession made
history May 8 when the Boards and
Council of all three organizations
signed an agreement to merge and
establish the Chartered Professional
Accountants of British Columbia
(CPABC). A full merger will take
place once CPA legislation is passed
by the provincial government.
By Candace Nancke, FCGA
Chair, CGA-BC
Gordon Ruth, FCGA
CEO, CGA-BC
outlook 17
COVER
Building a new professional accounting body
T
18 outlook
We know that
members of each
body are proud
of their legacy
designation, and
it is important for
them to know that
those rights are
protected in the
merger agreement
and will be a key
consideration in the
new organization’s
bylaws
>
he letters CPA now
symbolize a designation of 34,500
members and
students, making it
the second largest
professional body
(after the College
of Registered Nurses) in B.C. We’ll be
part of a 160,000-strong profession that
will reduce confusion among employers
and clients, protect the public and, by
speaking with one unified voice, maximize Canada’s influence on the international accounting stage.
The B.C. agreement took nearly two
years of discussions and many hundreds of hours of work by the senior
leadership – volunteers and staff – of all
three original organizations. It involved
significant member input through surveys, townhall discussions and extensive
correspondence with members and
students. In addition, the three bodies
liaised with government, accounting and
finance educators and other stakeholders in business. Each of the three bodies
had a merger task force comprised of
senior volunteers and their CEO that
engaged in face-to-face discussions and
provided briefings and reports to their
respective Boards and Councils.
In early May, the three bodies developed a legally binding and comprehensive merger agreement which “provides
direction around how the Unifying
Bodies propose to move towards unification….” A key element of the agreement is to set in place a transitional plan
that will allow the profession to merge
operations under the CPA designation.
It also prescribes a course of action in
what is called the consolidation phase
(follows the transition phase and begins
once new legislation is in place) which
will see the creation of CPA in B.C.
The comprehensive merger agreement
is the culmination of a process that has
been a case study in collaboration and
mutual respect; it recognizes the diverse
CGA-BC Past-President John Nagy,
FCGA, has been appointed to the Board
of Directors of CPA Canada. John is also a
Past-Chair of CGA-Canada.
backgrounds and histories of the three
organizations and their unique contributions to accountancy and accounting
education in B.C.
During the merger discussions, several
key issues were raised: protecting the
public, regulatory issues, legacy member
honours and awards, and protecting the
rights of members of each of the three
legacy bodies. We know that members of
each body are proud of their legacy designation, and it is important for them to
know that those rights are protected in
the merger agreement and will be a key
consideration in the new organization’s
bylaws (see sidebar for details).
The Roadmap To Success – The
CPABC Unified Direction Plan
The merger agreement specifies the creation of a Unified Direction Plan (UDP).
This plan was prepared by the respective
CEOs and approved by the CA Council
and the CMA and CGA Boards. It sets
the direction for the Transition Steering
Committee (TSC) – a committee that
has been established under the merger
agreement, and for the senior staff of the
bodies. It provides high-level direction
as well as a short-term path forward
as we develop a new Transitional Plan
reflecting the Eight Guiding Principles
of Unification.
The TSC is composed of members
from each legacy organization, supported by the three CEOs.
Transitional Management
Committee (TMC)
To effect the transition to CPA, the TSC
has established a transitional management committee to deal with planning
and operations. This committee consists
of senior staff from all three bodies and
the CEO is Richard Rees, FCA, the CEO
of the Institute of Chartered Accountants of B.C. Operationally, a three-way
framework will be created to enable
working together during the transition
stage.
Protecting Legacy Rights
Regulation
Until CPA legislation is passed, all three
bodies will regulate their respective
members under their current Acts. In this
respect nothing changes. The three bodies
must meet their continued and ongoing
regulatory responsibilities through the
transition and those responsibilities cannot be compromised by the activities or
resourcing requirements of the TSC. This
will include maintaining existing systems
for financial, member and regulatory
record keeping. The TSC will oversee a
joint process to develop legislative and
regulatory recommendations for the provincial government. Those recommendations will reflect national recommendations and international standards as far as
possible, recognizing the sovereignty of
BC and the three bodies. Recommendations will be referred for approval by each
governing Council and Board prior to
submission to government. Work on draft
legislation and bylaws is key and will
begin immediately.
Education
The Unified Directional Plan stipulates
that no final legacy exams will be offered
after September 2015, when the first CPA
final exam is scheduled. Students who
have not been able to complete the legacy
programs by that time will have opportunities to bridge into the CPA program.
Each legacy body will support legacy
candidates as they work to complete the
programs.
The new CPA profession will offer
three education programs:
• The Professional Education Program
(PEP) leading to certification as a CPA
• The Pre-requisite Education Program
(PREP) leading to access to the PEP
• The yet to be named Mid-Tier Program
leading to a certificate or credential.
The initial offerings of the PREP and
PEP will be this July and September
respectively. The plan is that recruitment will be fully integrated starting in
September 2013, and the existing legacy
In entering a merger agreement as complex as the unification of B.C.’s accounting
profession, it is important to ensure that all parties maintain all existing rights. The
merger agreement has several provisions that fulfill this goal.
Key Decisions
One of the important elements of the unification agreement relates to ‘key decisions.’
This ensures that, in the development of bylaws or other aspects of the regulatory
framework of CPABC, any change to the following four key areas would require a
high level of agreement. The areas are:
• Undertaking any measure that could impede the access of a legacy designation
holder to any part of the profession where they had previous access
• Making any change to the CPA certification model
• Promoting any accounting designation other than the Canadian CPA
• Any decision that would result in less rigour in any existing rule of professional
conduct.
Any such amendment would require the approval of each of the Boards of the Unifying Bodies before new legislation is enacted or a super-majority vote of more than
75 per cent of those voting on the CPABC Board after legislation is in place.
Regulatory Matters
The merger agreement recognizes that it is in the public interest that members of the
public continue to receive accounting services from their chosen professional advisors. It confirms the public and other practice rights of practicing individual members
and firms existing prior to the consolidation phase. It also confirms the rights of firms
registered in public practice to provide relevant work experience which qualifies
towards practical experience requirements or bridges into public practice to continue
providing such experience.
It also recognizes the right of legacy designation holders to enter or re-enter public
accounting where that legacy member had access to such practice immediately prior
to the beginning of the consolidation phase, subject to the entry requirements of
CPABC applicable at the time of such entry.
Also, the agreement provides that members can enter public practice by acquiring public practice experience either in an environment similar to the certification
models of approved path or experience verification. This could involve prescribed
seminars and courses and mentorship but would not require employment in an approved public accounting firm.
The agreement specifies that the issues above will be addressed in the initial bylaws
for CPABC or in legislation presented for consideration by the provincial government.
Legacy Protection Principles
The agreement protects the legacy rights of members of all three bodies. It specifies
that “During the Consolidation Stage and beyond, all members of CPABC will have
access to all available member services and supports without differentiation between
legacy designation holders and/or members who qualified through the CPA program.”
Member Awards
All existing member honours, designations and recognitions of the Unifying Bodies,
including fellowships, life awards and other honours, will continue during the transition to CPABC, and will evolve with the new organization.
outlook 19
COVER
Building a new professional accounting body
programs will conclude in the fall of
2015.
Pending the development and acceptance of a long-term plan for delivering
the new education programs, the initial
offering will be done through a combination of existing regional and provincial education delivery systems. These
details are being developed and will be
agreed to by all three bodies.
Member Programs
Our objective is to fully integrate all
member communications programs and
services by September 1, 2013. There
will be some limited communication
required to the three separate memberships regarding certain regulatory
matters, legacy student communications
and specific membership matters such
as AGM notices. The intent is to support
unification at the outset by beginning to
treat all members in the same way. We
also plan to integrate member benefit
programs as soon as possible, recognizing that some programs consist of
regional or national agreements that
may take some time to rewrite.
Branding and Marketing
The three bodies have agreed to
rebrand all their activities as CPA as
soon as possible. In general, there will
be no legacy branding or marketing
activities after September 1, 2013.
There may be some exceptions if mutually agreed-to events, or events such
as conferences or a convocation, need
to reflect legacy branding.
Use of the Designation
When news of the merger reached
members, many asked when they could
start using the new CPA designation
along with their existing legacy designation? As it stands, this can only happen
when provincial legislation is proclaimed. However, the three bodies are
exploring whether there is a way B.C.
members could begin using the CPA,
20 outlook
Guiding Principles for Unification
1. Evolution to a single designation
2. Continued use of existing designations
3. Retention but no expansion of rights
4. Certification
5. A single designation with specialties
6. Branding the CPA designation
7. Common code of conduct, regulations and the practice of public
accountancy
8. Merged operations and governance
CA/CMA/CGA designation before the
legislation is officially changed. We believe this will develop collegiality within
the membership, provide a strong link to
the branding efforts expected in the fall
and create a sense of unity amongst all
three legacy designations.
Operations
The staff of the three bodies are critically
important to the success of unification.
The organizations are implementing a
joint staffing plan to ensure that the
new body continues to deliver top-rated
services. Unification may also provide
opportunities to collaborate on systems
nationally or regionally. It is agreed that
CPA should use harmonized system
platforms wherever possible.
Dues
The three bodies will work towards the
implementation of a harmonized fee
structure as soon as possible.
Next Steps
With the approval of the three governing bodies and the TSC, the new TMC
will take the Unified Directional Plan
and begin developing a three-party
Transitional Plan for 2013-14. This will
be overseen by the TSC and will then go
to the CA Council and CGA and CMA
Boards for approval.
Unification has been an elusive goal
over the past 40 years or so. Each organization brings many strengths to the
table that will result in a competitive,
and globally respected, accounting designation. And because it brings together
the best of the three designations, we
believe that this agreement will lead to
a stronger designation that will benefit
members, students and the public.
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feature
Where contract indemnification requirements go beyond the scope of insurance coverage, be sure
you understand what additional financial risks you will assume before you sign the contract.
How one little clause could potentially expose your
organization to financial risk
Indemnification
Agreements
By Linda Simmons, CAIB and Freda Xue, CGA
>
22 outlook
Have you ever signed a contract without first reviewing the Indemnification Agreement it contained? Or have you reviewed the agreement without first considering
the implications and potential risks to your bottom line? If so, you are not alone.
You may have glanced over the agreement and everything seemed to be in order –
after all, a lawyer drafted the agreement in the first place. Knowing this, ask yourself
whose lawyer and whose best interests were being represented when the contract
language was drafted. In all likelihood, not yours.
Clients routinely ask their insurance broker to issue Certificates of Insurances
(evidence of insurance) as requested by a third party. The Certificates may be for
work or services they provide to a third party, for premises they lease or for contract
prequalification purposes. Savvy insurance brokers will request a copy of the contract
before issuing the Certificate. Reviewing the contract will ensure that your insurance
policy complies (where possible) with the contract’s provisions. Often, the contract
is already duly executed by the time the broker reviews it. Only then does the broker
learn first hand what contractual obligations their client may have unknowingly
agreed to.
The best time for your insurance broker to act as your risk advisor and make
recommendations is before you sign the contract. They can also discuss any potential
additional cost implications if the requirements exceed your current insurance
program. It is important to note that while reviewing the contract is critical, not all
insurance brokers extend this professional service to their clients. The Indemnification Agreement should always be included as part of the contract review process.
Insurance brokers are not lawyers. While they can and do make some recommendations for minimizing your exposure to risk, your lawyer should always be consulted
as well. A broker’s indemnification
review is simply to highlight some
of the areas (or often words) in the
agreement where the indemnification requirement is broader than
the scope of insurance coverage
provided by the insurance policy.
If the contract Indemnification
Agreement is broader than your
insurance coverage, your organization has a potential exposure to
uninsured financial loss.
The following example demonstrates only a few of the indemnification pitfalls that may be included
in an Indemnification Agreement
(whereby, a third party contractually
transfers liability to your organization).
Contract Example – The
indemnification Agreement
clause reads:
“The contractor shall indemnify and
hold harmless1 XYZ Company,
its directors, officers, employees,
agents2, subsidiaries and affiliates2 against all3 losses, expenses,
demands, claims, actions, damages, liabilities, costs, penalties,
fines, awards, including directly or
indirectly from ANY default of the
contractor under this agreement,
or any negligent act or omission by
the contractor.”
Wow! So many words to fully
interpret, understand and digest.
What could possibly be wrong with
the above statement? Plenty. One
little clause could potentially expose your organization to financial
risk.
Review Item 1
By agreeing to include a “hold
harmless” clause in the contract,
you may
inadvertently
release a third
party from nearly
all legal responsibility, even if the
third party is negligent.
A third party’s hold harmless
agreement essentially contractually
transfers their legal responsibility to your
organization. It is therefore important to
understand the breadth of legal responsibility you take on and to know if all or
any part of it is covered by your insurance
policy.
Also, signing away your insurer’s rights
can be dangerous. If your insurer has not
agreed in advance to add the hold harmless provision or will not agree to add it
to your policy, they are not bound by the
terms of the clause.
Review Item 2
Including “agents” and “affiliates” in the
contract is a little like tossing in the kitchen sink. Their inclusion can be construed
to mean that your organization is responsible for indemnifying anyone remotely
connected with a project/contract/lease.
In essence, using “agents” and “affiliates”
language is considered too broad and
can expose your organization to unnecessary risk if the loss is not covered by your
insurance policy.
Why? By including such a broad spectrum of unknown Additional Insureds,
these additional entities can erode your liability limits, which are ultimately in place
for your own benefit. Remember, every
Linda Simmons, CAIB, is a Client
Executive and Freda Xue, CGA, is the
Controller for BFL CANADA Insurance Services Inc.
entity named in your policy, whether it
is the Named Insured or an Additional
Insured, shares in the same liability policy
limits.
In addition, while contractually you
may agree to include a broad list of
Additional Insureds such as “agents” or
“affiliates”, your insurer may not necessarily agree to add them to your liability
insurance policy. Insurers routinely reject
adding coverage where the contract
includes such language. This is because
they have no way of evaluating or
underwriting the risk these entities may
expose your policy to. Unless your policy
contains a Blanket Additional Insured
endorsement (most do not), each additional insured must be specifically
named in your policy.
Review Item 3
“ALL” losses, expenses, demands, etc.
The key word is “all”. One small word, with
such big implications. Liability insurance
policies contain terms and conditions;
however, no matter how broad the policy
wording is, it will never cover “all” of the
risks enveloped in such a broad statement.
Consider the following: all expenses,
all demands, all claims, all actions, all liabilities, all costs, all penalties, all fines, all
awards. Are all of these insured? Your insurance will cover some, but certainly not
all. A Commercial General Liability policy
is not intended
to cover every
type of liability that
an organization faces,
such as liability associated with watercraft, aircraft,
WCB, automobiles, pollution,
contract breaches, penalties, fines,
illegal acts and privacy breaches just to
name a few. Separate liability policies are
available to cover certain types of liability
such as automobiles, watercraft, pollution
and privacy breaches.
There are ways to reduce or limit your
exposure to financial risk or to uninsured
losses:
• Together with your insurance broker,
review the Insurance and Indemnification Agreement clauses before signing
any contract.
• Consult a lawyer for recommendations. While it is not always possible to
modify the Insurance and Indemnification Agreement clauses, some clients
have reported successes in doing so
(provided, however, that the changes
were negotiated before the contract’s
execution).
• Where contract indemnification
requirements go beyond the scope
of insurance coverage, be sure you
understand what additional financial
risks you will assume before you sign
the contract.
• If the contract benefit is too small and
the risk too high to justify the impact
to your organization, consider walking
away from the contract and look for
opportunities with greater rewards.
(Risk Avoidance is one of many risk
management strategies that you may
already practice and should consider
when reviewing all contracts. Ultimately, reducing your risk protects your
organization’s financial well-being.)
outlook 23
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feature
CGA Neal Chaudhary leads fast-rising firm that brings independence to
the enterprise software selection process
By Patrick Schryburt
Success is Infectious
>
As a leading Canadian manufacturer of surveillance products, Avigilon understands technology. Yet
when it was time for the company to choose new ERP (Enterprise Resource Planning) software for its
own business, they wisely decided to seek expert advice. While several companies answered the RFP for
a vendor to evaluate and recommend networking software, Avigilon’s decision ultimately came down
to two firms.
One was Panorama Consulting Solutions in Denver, arguably North America’s leading independent
consulting firm for small and mid-cap companies seeking enterprise resource planning solutions. The
other was a small, aggressive firm based in Vancouver’s Gastown neighbourhood.
As the bidding process progressed to decision-time, one of the selection criteria that mattered to
Avigilon was size and market presence. Panorama was obviously the industry giant with a client list that
included Boeing, Kimberly-Clark and Dean Witter.
While the Canadian upstart was much smaller, it was growing fast and in the process of hiring two
more consultants to bring its total staff to eight. Although this did not rival Panorama’s size, it turned out
to be big enough. Avigilon chose David over Goliath.
For the firm’s co-founder, Neal Chaudhary, CGA, this victory was sweet indeed. It not only reaffirmed
the fact that his small company – Tacit Management Consulting Inc. – was well on its way to bigger and
better things, but it also validated his belief that success is infectious.
“There is tremendous satisfaction in having a vision come to light,” Chaudhary says. “I really believe
that our employees and even our clients draw something meaningful from our success. People want to
be part of something successful and the little wins along the way, beating Denver, these things matter.”
A Happy Marriage between CGA and IT
The seeds of Chaudhary’s vision were sown early in his professional career. After completing the CGA
program and earning a Bachelor of Accounting Science from the University of Calgary, he moved back
to Vancouver in 2002. One of his first professional opportunities was working as a controller for an IT
systems company. “One day the firm said ‘we need you out in the field’ and so I began working directly
with the clients,” he says.
Chaudhary was open to moving beyond the comfortable confines of his job as controller because
he saw having greater exposure to clients as an opportunity. “Being in the field was exciting,” he says.
“I enjoyed being able to use my skills and background to solve problems and serve as a middle man
between finance and IT. As a CGA, I was uniquely qualified to deal with the CFOs who were making IT
decisions because I understood where they were coming from and what their concerns were.”
outlook 25
feature
He later spent three years
employed by Goldcorp, including
a period where he worked with
one of its subsidiaries in Mexico,
but after dabbling in the mining
industry he restored his connection to the world of IT when
he joined GNA Consulting in
Vancouver.
While working at GNA, he
worked closely with colleague
James McGregor, doing lots
of IT project rescue work for
the firm. The two noticed that
companies were consistently
choosing the wrong applications
for their needs and undertaking large projects without fully
understanding the far-reaching
consequences of their choices.
These companies were spending
millions of dollars on software
and related systems with poor,
and in some cases disastrous,
results.
Why Companies Make
Poor Decisions
As Chaudhary witnessed, spending on information technology
can account for a significant part
of a company’s budget so it’s
easy to understand why the lines
from the IT department’s boxes
on the organizational chart can
often be traced directly up to the
CFO’s box.
The risk of making the wrong
IT spending decision is further
compounded by the fact that
CFOs and IT personnel often do
not speak the same language.
Paul Zazzera, the former Chief
Information Officer for Time
Inc., summed up the issue that
confronts many accounting
and finance people in similar
decision-making positions: “Show
me how the $1 million we spend
is going to generate $10 million
in value for our company and
26 outlook
“As a CGA, I was
uniquely qualified to
deal with the CFOs
who were making IT
decisions because
I understood where
they were coming
from and what their
concerns were.”
Neal Chaudhary, CGA
you’ll get my attention. Talk to me
about chipsets or bandwidth, and
I’ll start yawning.”
This is a challenge for a
number of reasons. According
to a survey by CIO Insight and
Computerworld, 80 per cent of
enterprise software purchasers
considered financial justification
as a key criterion for the approval
of IT expenditures. More than 65
per cent of buyers, however, do
not have the tools or knowledge
base to perform any related
return on investment (ROI)
calculations.
As a result, companies often
rely on vendors for such calculations. In fact, research conducted
by Ernst & Young showed that
81 per cent of buyers expect IT
vendors to quantify the value
proposition of their proposed
solutions.
This creates a dilemma: the
decision to buy hinges on criteria
the buyer cannot properly evaluate but requires for approval, so
they allow the seller to do it for
them, which leads to an inherent
conflict of interest.
Of course, the challenge is not
just an issue of calculating ROI.
Vendors will naturally highlight
the importance of features
that are strengths of their own
products but that are not necessarily relevant to a company’s
critical needs. “Those who are
tasked with making these critical
decisions must ask themselves if
these benefits are truly those that
their business requires,” Chaudhary says.
Tacit Management
Consulting
Ensuring that such things do not
take precedence over other unaddressed needs is why independent counsel can be so valuable.
Chaudhary and McGregor had
spent most of their careers helping fix problems caused by poorly
selected and implemented enterprise software. They co-founded
Tacit Management Consulting
in January 2012 because they
wanted to bring an independent
approach to helping companies
select and implement enterprise
software to reduce the risks of
making the wrong choices.
Like many entrepreneurs,
Chaudhary’s decision to start his
own business was rooted in a desire for greater autonomy. “I think I
always wanted more control over
my career destiny,” he says.
He and his co-founder worked
hard to mitigate the many pitfalls
that can derail new enterprises.
“The financial risk was our
number one concern,” he says.
“We each had savings so we
could operate for six to eight
months.” They also created an
extensive business plan with key
milestones to ensure they stayed
on track, and they analyzed why
partnerships fail and worked
safeguards into their shareholder
agreement.
Once they were up and running, they began pursuing their
mission of becoming the most
respected and trusted software
selection firm in Canada. “We are
not selling services, we are selling
confidence,” Chaudhary says. “We
need to convince our clients to
hand over the keys to the software selection process.”
This can be difficult to do,
which is why many companies
often try to do it all themselves at
first. “We had already started the
implementation of our new ERP
system but were struggling with
the implementation company
and the general direction of
the project,” says Chris Bray, an
CGAs are accomplished professionals. In this feature, we highlight
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accountant with Lesley Stowe Fine
Foods who is currently enrolled in
the CGA program. “Tacit took the
lead and we were able to
meet all our goals on time
and below budget.”
As Chaudhary explains, the most
important factor is Tacit’s independence. “We are vendor agnostic and
we are product agnostic,” Chaudhary says. “This independence
means that we never favour one
solution over another unless it’s
truly the best match for a client’s
requirements. We are always working to do what is in the client’s best
interest.”
For controllers and CFOs, Chaudhary’s background as a CGA is also
a source of comfort. “His [Chaudhary’s] CGA designation was a major
factor in my decision to engage
Tacit,” says Melanie Pump, CGA, Controller for Platinum Group Metals.
“Neal understands public company
financial reporting requirements
and the complexities of compiling
this information, which was crucial
to accurately assessing our needs.”
A Bright Future
Tacit’s success to date is a testament
to all the hard work the co-founders
have put into their business.
Their focus is now on managing
their growth. In fact, maintaining
work-life balance continues to be
a challenge for Chaudhary. Yet this
CGA with an IT bent still finds time
to run the occasional marathon and
is contemplating his first triathlon.
With his mind firmly focused
on what the future might bring,
Chaudhary can look back and draw
satisfaction that his vision has become reality. And with a prospective
Tacit client list that now reaches into
the Okanagan, Alberta and even
Ontario and the United States, there
is little doubt that success is truly
infectious.
keepingTabs
CGAs in the News
Members on the Move
Kay Gray, CGA,
received a Big Heart
Award from the Big
Sisters of BC Lower
Mainland for her outstanding contributions to the Big Sisters organization. During the past eight years, she served as the
organization’s Chair, Vice Chair, Treasurer
and participated in many committees.
Kay is a partner at Grant Thornton LLP and
she has been the driving force behind
the firm’s corporate support of Big Sisters,
which has included the ‘Make a Difference’
university recruitment campaign, that allowed potential hires to select a charity of
their choice to receive $10,000.
Gabrielle Loren, CGA, has joined the
board of the Lions Gate Hospital Foundation. Gabrielle is is a founding partner
of Loren, Nancke & Company, which
has offices in North Vancouver and New
Westminster.
CGA-BC Past-President John Nagy, FCGA,
has been appointed to the Board of Directors of CPA Canada. Mr. Nagy is a Director
of Reid Hurst Nagy Inc.
We appreciate your contributions to
‘Keeping Tabs.’ If you would like to
submit news or updates concerning
yourself or a CGA you know, please
email details to: outlook@cga-bc.org.
Vancouver – Mid-size CA firm looking to assist with your succession plan.
$500k to $2m range. We can buy or merge in if the fit is right.
Staying on after a purchase to affect a smooth transition is possible.
Reply in confidence to: mergeprose@gmail.com
Core elements 1/6
outlook 27
feature
T
NE
OF
DE
1
RI
“I want people to know that what the Foundation is doing is amazing. The life of my family has
P
changed and without
H E the Foundation’s help, it would not have been possible.”
O
OF O
F ON
E
1
O NE
How the CGA-BC Educational Foundation helped Nathalie
Abramovich, CGA, rebuild her life on solid ground
Hope in Hard Times
By Nadine Pedersen
>
28 outlook
In her home in South Vancouver, not far from where the Fraser River relaxes for the
final leg of its journey to the Pacific Ocean, Nathalie Abramovich serves tea from a
silver tray.
The tray is both beautiful and practical, helping Abramovich carry things up and
down the four floors of her new townhouse. But it is more than just a useful object: it
is a symbol of gratitude and of survival.
Abramovich won the tray at a silent auction raising funds for the CGA-BC Educational Foundation. Actually, there were a few other items she acquired at the auction
as well.
“I pretty much bid on everything that was on the table, and I got most of it,” recalls
Abramovich with a laugh. “Basically, I bought out the store.”
Watching her that night, someone could be forgiven for thinking Abramovich had
gotten carried away celebrating her graduation from the CGA program and recent
promotion to Senior Manager at The Raber Mattuck Group, a Vancouver public accounting firm. Only those who know her well would have understood that beneath
the lighthearted, if competitive, bidding something else was at play – Abramovich
was giving back.
“My sons and I would never be where we are today without the Foundation’s help,”
says Abramovich.
In January 2006, Abramovich’s life abruptly changed when she received a phone
call telling her that her husband had died suddenly of a heart attack.
“My husband had no life insurance,” recalls Abramovich. “When he passed, there
was nothing.”
His unexpected death meant Abramovich had to suddenly figure out how to
support their two children on her
part-time income as a bookkeeper.
Complicating things, as Russian
immigrants who had moved to
Vancouver only a few years before,
they had no family to turn to for
emotional or financial support.
To this day, Abramovich does not
like to talk about the hard months
that followed. Luckily for her, she
did have prior experience starting
her life over again from scratch, and
this likely helped her when things
got tough.
Abramovich arrived in Montreal
from Moscow in her early twenties with all of $300 in her pocket.
Within a few months, she had
mastered enough French to get a
job helping support senior citizens
through a local non-governmental
organization.
A few years later, when the ice
storm of 1998 left her and her
family without electricity for three
months, and after they nearly died
from carbon monoxide fumes getting sucked into their house from
the generator outside, Nathalie decided they should uproot and move
to Vancouver’s more hospitable
climate.
Following her husband’s passing,
Abramovich knew that she needed
to find a better job to support her
family. To do that, she needed more
education, a career and the flexibility to care for her sons. After consid-
> Abramovich won the Barbeau
Silver Medal and placed in the top
10 students of her graduating class.
outlook 29
feature
“I am doing this [interview] because I want people to know that what the Foundation is doing
is amazing. It’s giving people opportunities that they would not have…the life of my family has
changed because of this.”
ering her options, she borrowed money from
friends and enrolled in the CGA program.
“I could continue working, and I could
study at home. Because, well, my little one
was eight – you have to be there for an
eight-year-old who’s going through a tough
time. You have to kind of physically be there,”
explains Abramovich.
BRIDGING THE GAP
UBC Diploma in Accounting
Have a university degree but lack the prerequisites to
enter a professional accounting program?
The UBC Diploma in Accounting program (UBC DAP) bridges the
gap by equipping graduates with the foundation for success in a
professional accounting designation. Widely recognized by the
accounting industry, the program can be completed in as little as
10 or as long as 24 months while candidates continue to work.
Find out how UBC DAP can help you put your career aspirations
into action.
www.sauder.ubc.ca/dap
THE UNIVERSITY OF BRITISH COLUMBIA
30 outlook
“So I realized that this was the way
to do it, that I could eventually work
in a profession that’s respectable and
respected, and that I could make more
money, to be honest, because we
needed it.”
What made the CGA program possible
was that Abramovich learned that after
completing two courses she could apply
for financial assistance from the CGA-BC
Educational Foundation.
“I had never asked for assistance
before,” says Abramovich. “That was kind
of a leap of faith too, because you’re
asking for help – it’s kind of embarrassing
in a way. Like, ‘Can’t you manage on your
own?’”
However, with help from the Association’s Penny Hurst and Elize Combrinck,
she filled out the Foundation’s application and began receiving the funding
she urgently needed to stay in the
program.
And then, despite her ordeal, and despite having to juggle school, work and
being a single parent, Abramovich prevailed in her career and studies. She won
the Level 3 and Level 4 Tuition Scholarships (awarded to the CGA student with
the highest aggregate standing in those
levels of the program), was awarded
the Barbeau Silver Medal (for having the
highest aggregate standing in all taxation courses) and placed in the top 10
students of her graduating class.
And when it was all over, and she had
a secure job and a bright future ahead
of her, she splurged at a silent auction
to help others receive the same kinds of
opportunities the Educational Foundation gave her.
“I am doing this [interview] because
I want people to know that what the
Foundation is doing is amazing,” says
Abramovich between sips of tea.
“It’s giving people opportunities that
they would not have…the life of my
family has changed because of this.
Dramatically changed. And without the
Foundation’s help, it would not have
been possible.”
Nadine Pedersen is a writer and editor based in Vancouver.
feature
Many incentives for accountants and their clients to participate
in the program
Climate Smart Program
Adds Up for Accountants
By Nina Winham, for BC Hydro
>
32 outlook
“Accountants are the perfect partner in this program because they live by the adage,
‘What gets measured, gets managed.’” So says Elizabeth Sheehan, the co-founder of
Climate Smart, a social enterprise launched in 2009 to provide small and mid-sized
B.C. businesses with the tools for profitably reducing their greenhouse gas emissions
while improving their bottom line.
What exactly does that mean? “It’s helping businesses reduce energy, transportation and waste-related costs associated with their business operations,” says the
passionate Sheehan, as she takes time out from a busy day training corporate leaders
in Climate Smart principles.
“We do that by training key staff people in businesses and teaching them in a
group or cohort format,” she explains. “So this morning, down the hall, a bunch of
businesses are in a room together. They’re collectively using an international accounting standard called the Greenhouse Gas Protocol. The world has agreed: this is
how you have to quantify your baseline – your energy, your transportation and your
waste – and translate that into ‘how many CO2 emissions does that actually generate?’”
As Sheehan points out, it has become crucial to remember that we now inhabit a
world where carbon emissions are associated with a cost – both environmentally and
through carbon taxes. Many countries now require that publicly traded companies
reveal and report on their CO2 emissions.
“This is a very central bridge to accountants, who have focused on the financials
and risk, to now begin to understand the international approach to accounting for
your emissions: your energy, your transportation and your waste-related costs and
risks,” she says. “Accountants are also skilled professionals in assessing and quantifying
risk. So they’re a great partner, wonderful allies.”
Hundreds of B.C. businesses have
signed on to the Climate Smart
program since its inception, ranging
from construction companies to food
manufacturers to law firms. The cost to
participate is scaled to the size of the
organization. Fees range from $1,250
to $2,000 per business, which includes
12 hours of training for up to two
people, plus access to client advisory support and software. Discounts
are available through participating
municipalities, such as the cities of
Vancouver and Surrey, and for Vancity
business members.
Sheehan says there are many incentives for accountants and their clients
to participate in the program.
“On an individual level, our 12
hours of training is recognized as a
source of professional development
credits,” she says. “We’ve had a lot of
interest from accountants to join us
in that way.”
At the company level, she says,
participants benefit by leading their
business through the program.
This means the company gets its
greenhouse gas inventory done
according to international standards,
with coaching and advisory services
available as they go. Access to Climate
Smart’s specialized software makes
collecting and assessing emissionsrelated data easier.
Finally, Climate Smart does a
third-party review of the company’s
greenhouse gas inventory, and provides certification once the company
has submitted its list of reduction
strategies.
“They get a certification and they
get to brand and be recognized for
their leadership,” says Sheehan. “Those
are some of the top-line benefits: they
can demonstrate and share from a
third-party standpoint their commitment
and their climate leadership.”
A number of accounting firms have
already been sold on the benefits of
Climate Smart.
• Brad Cran, of Cran & Co., the accountant, social entrepreneur and former
poet laureate of Vancouver, wanted
to help draw a direct connection
between personal accounting and carbon footprinting. In 2012, he launched
EcoTaxFile: the first online accounting
and tax service that also calculates a
client’s carbon footprint, powered by
Climate Smart. EcoTaxFile gives individuals and businesses the information
and tools to maximize returns while
reducing environmental impact.
• EPR Accounting and Business Advisory
Services Coquitlam recently renovated its offices, which gave them an
opportunity to retrofit their lights to
more energy-efficient ones. They also
redirected the heat from their server
room, which used to require intensive
air conditioning, into their ceiling to
be dispersed throughout the floor.
These initiatives led to a nearly 20 per
cent reduction in electricity use over
the winter months from one year to
the next.
• After their first year with Climate
Smart, Loren, Nancke & Company
committed to reduce their emissions
by storing more files electronically, reducing hard-copy printouts to clients,
increasing the number of recycling
bins (while decreasing the number of
waste bins), implementing a “turn-itoff” policy for office equipment and
switching to a more environmentally
friendly courier service. By their second year, they measured a 33 per cent
reduction in their carbon emissions.
“It has become crucial to
remember that we now
inhabit a world where
carbon emissions are
associated with a cost –
both environmentally and
through carbon taxes.”
Elizabeth Sheehan, Co-founder of
Climate Smart
Climate Smart was recently named to
the “B Corp Best for the Environment
List” for ranking among the top 10 per
cent of more than 8,000 businesses with
the most positive overall environmental
impact. The top ten per cent include 63
companies across 30 industries and 11
countries. Here in B.C., a recent review of
Climate Smart’s impact, commissioned
by the Pacific Institute for Climate Solutions, shows that the program is making
a difference across the province.
“We did some number crunching on
about 500 B.C. businesses that had gone
through the Climate Smart program,” says
Sheehan. “We focused on 11 case studies,
demonstrating that businesses were able
to achieve an average payback of just
under two years. After that, they realized
the cost savings from lower heating,
electricity and lighting costs.”
For some, savings were substantial, as
much as $154,000 per year. The report
states, “This research paper disputes
the notion that the transition to a lowcarbon economy will create an undue
burden on businesses, especially the
small-to-medium-sized enterprises
(SMEs) that are responsible for an estimated 20 percent of British Columbia’s
greenhouse gas emissions.”
Says Sheehan, “Our commitment is to
do this exercise with a business-casebased approach. We’re helping those
businesses think about and develop
strategies for reducing their energy and
their fuel and waste – and build a stronger business at the same time.”
A booklet written specifically for B.C. accountants on the benefits and features of Climate
Smart will soon be sent electronically to
every CGA in the province. For more information, see climatesmartbusiness.com.
outlook 33
“There is no networking gene. It’s a skill that each of us can develop and apply very effectively in
many aspects of our lives.”
Dan Relihan, CGA, Manager, Recruitment and Employment Initiatives, CGA-BC
publicpracticeEdifier
Playing the Networking Game
A few networking pros share their secrets for developing a key skill
By Patrick Schryburt
L
egendary American writer and
self-improvement expert Dale
Carnegie once quipped that “you
can make more friends in two
months by becoming interested in other
people than you can in two years by trying to get other people interested in you.”
It’s a wise statement, and it’s one that still
applies when you swap ‘friends’ for ‘clients.’
Successful practitioners understand
that their ability to relate to people and
build relationships based on mutual trust
is a large contributor to their professional
success. The idea that ‘relating to people’
is good business practice is certainly
not revolutionary – after all, it’s a central
component of networking. While many
accountants feel apathy or even anxiety
about the thought of networking, these
feelings are both avoidable and counterproductive to achieving business goals.
Networking will benefit
your business
Being an effective networker will help you
manage your career and develop your
business. Professional recruiters consider
networking to be the most effective strategy for job seekers hoping to land a new
position. Research has shown that most
34 outlook
hirings today originate from a contact in a
current professional network or recommendations from friends and colleagues.
“Networking should be the primary
focus of every job search,” says Candace Nancke, FCGA. CGA-BC’s Chair is a
founding partner of a successful public
accounting firm, and as someone who
routinely hires staff, she has good insight
into the most effective recruitment strategies.
“You need to network continuously,”
Nancke adds, “since this is the best way to
tap into the hidden job market – the jobs
that are not publicized.”
The benefits of networking for those
seeking to grow their business are equally
strong. Neal Chaudhary, CGA, says he can
trace back most of his firm’s clients to
his and his partner’s networking efforts.
“We are the business development team,”
Chaudhary says. “Our business growth is
due to lots of networking.”
While many people associate networking almost exclusively with job hunting or
sales, successful practitioners understand
that it is also the foundation of the management and growth of an accounting
practice.
Brian Blamey, CGA, a partner with the
public accounting firm Galloway Botte-
selle & Company, explains how his networking strategy reaches beyond career
management or business development.
“My goal is to build a network of professionals – bankers, lawyers, investment
advisors – who may refer new clients to
our firm, but who can also be someone
I can refer a client to when they are
looking for non-accounting advice.
These are some of the most important
people that have become part of my
network and they are people I can call
for advice.”
Networking myths
We often believe that some people
are simply better at networking than
others – that they are born to do it. It’s
natural to assume that someone who is
comfortable with networking has been
endowed with personality traits that
lend themselves to proficiency with this
skill. The reality is quite different.
“It’s a fallacy that some people are
born with networking skills while others
are not,” says Dan Relihan, CGA, who is
Manager, Recruitment and Employment
Initiatives with CGA-BC. “There is no networking gene. It’s a skill that each of us
can develop and apply very effectively in
many aspects of our lives.”
Jas Randhawa, CGA, Manager, Recruitment for CGA-BC, goes even further and
suggests that we all have a certain anxiety when it comes to networking. “I think
it’s important to realize that everybody
is uncomfortable in a networking situation,” he says. “They may not show it, but
there is discomfort to varying degrees
for every person.”
Three key principles
on how to
resources, courses and
tools of the trade
‘schmooze’
practiceUpdate
As the lead strategists for CGA-BC’s recruitment activities, Dan Relihan, CGA, and Jas
Randhawa, CGA, have an in-depth understanding of the most effective networking
tactics. They identify three guiding principles
that form the basis of a successful approach.
The first principle is to understand
that in many ways networking is an
“act” requiring you to adopt a performance
mindset. It’s imperative that you have a positive, engaging and energetic attitude since
that is what can create a lasting, positive
impression.
1
The second principle is that effective
networking is about making people
feel good about themselves. Remember that
everybody is uncomfortable to some degree.
You want to make others feel that you are
pleased to meet them, convey that you are
interested in what they are saying and show
that you are paying close attention.
Start with solid eye contact and a confident handshake and then ask them questions and get them to talk about themselves.
If you make people feel good about themselves, they will have a favourable recollection of their conversation with you.
2
The third principle is simple: always
be prepared. It’s a good idea to
prepare a quick introduction in advance that
comes almost automatically, usually with
your first handshake. You should also have
your own 20-second ‘elevator’ pitch that
describes what you do and what your firm
does.
3
These guiding principles should help you
figure out what is important in a given situation. Remember that first impressions last
a long time. And finally, the easiest way to
start a conversation is to simply introduce
yourself with a prepared quick introduction,
and then simply ask questions to get the
other person talking.
Developing your skills
If you accept the premise that networking can help build a successful
practice, and that it is a skill that can
be developed, this naturally leads to
questions about what we can do to be
better networkers. Most experts agree
that in interpersonal situations, the
best networkers are listeners just as
much as they are talkers, and that establishing mutually engaging dialogue
is the best approach to successful
networking.
“It’s not all about telling the other
person what it is you do,” says Blamey.
“By asking the other party what they
do there are lots of opportunities to
tell them about yourself and your firm.”
As Blamey has discovered, a networking encounter is an opportunity
to inject key information about his
firm into the conversation, thereby allowing him to distinguish himself from
other accountants and accounting
firms. “I have a few key comments that
I like to include during a conversation
with a potential client,” he says. “For
example, I will often tell a prospective
client that ‘I probably don’t prepare
the financial statements or tax returns
any better than another accountant,
but it’s what I do with this information
that I think sets me apart from other
accountants.’”
The good news for practitioners is
that developing networking skills is
attainable with a little effort and practice. “I think just getting out there at
every opportunity and doing it is the
best way to develop networking skills,”
Blamey says. “Initially it might feel awkward, but over time you become more
comfortable and will develop your
own approach to the process.”
There are always opportunities to
network, and while not every person
you encounter will become a source
of referrals, it’s an exercise that can be
invaluable to any business.
Public Practice Events on September 19
at the CGA-BC Conference
Come join us on Thursday, September 19 for
an all-day focus on public practice during the
2013 CGA-BC Conference. All practitioners and
professional staff are invited to attend. The
Annual Public Practice Meeting will include
informative roundtable discussions about data
security (primarily relating to cloud use) and
technology risk management. Mike Priddle,
adjustor for CGA-BC’s professional insurance
carrier, AON Reed-Stenhouse, will speak about
the most common claims and how to avoid
them. The facilitator for the meeting will be
Roy Johnson, a seasoned CGA-BC seminar
presenter, whose humour and charming
style is sure to keep you engaged. This will be
followed by an afternoon Public Practice Standards Update presented by Michael Ell.
Exposure Draft of Proposed New
Standards for Review Engagements
The Auditing and Assurance Standards Board
unanimously approved its exposure draft of
a proposed Canadian Standard on Review
Engagements (CSRE) 2400, Engagements to Review Historical Financial Statements, to replace
existing standards for review engagements.
The exposure draft is expected to be issued
in June 2013 and will have a response date of
October 11, 2013.
Approved Amendments to Money
Laundering and Terrorist Financing
Regulations
Amendments that affect reporting entity obligations regarding ascertaining identity have
been approved and will take effect February 1,
2014. For more information on this regulation,
consult the regulation and guideline sections
of the Financial Transactions and Reports
Analysis Centre of Canada (FINTRAC) website. Updated information about the recent
changes to reporting entity obligations will be
available in the fall of 2013.
In this issue of Current Assets we celebrate industrial innovation with a slight lean towards summer fun
and kitch gadgetry.
$5.99
$40
$21
$60
currentAssets
$34.99
36 outlook
>
Magnetic Force Nail Polish
Ever have trouble finding a paper clip when you
need one? Problem SOLVED!
www.thinkgeek.com
Tactical BBQ Apron
Without tactical planning, the average summer
BBQ threatens to descend into small-gathering
civil unrest at any moment, replete with smoky
burgers and angry hungry mobs protesting
on the patio. Deal with the situation head on
by adorning yourself in The Tactical BBQ
Apron. Once properly outfitted in the
latest tong, brush, thermometer, and spice
technology, you’ll be fully equipped for any
emergency cooking issues that may crop
up this season.
www.thinkgeek.com
>>
>>
Plank
Utilitarian, sleek and priced as sharply as it looks.
www.touchofmodern.com
>
Marshall headphones
The good folks at Marshall have been around
since the early days of rock and roll as manufacturers of high-quality guitar amplifiers.
Accordingly, their foray into headphones
inspires confidence. The ear buds come
with four different sized pads allowing for a
customized fit. They also secure into position
at two separate points, which greatly adds to
user comfort. The device has a built in remote
and a stylish design that draws from the classic Marshall gold and black amp exterior. In
terms of sound, the headphones offer solid
bass amplification while also balancing treble
with ease.
marshallheadphones.com
touchofmodern.com
>
>
By Trevor Hargreaves
Slim Leather Wallet Case iPhone 5
Combining a trimmed down wallet with
an iPhone case is a great way to avoid
lumpy, overfilled pockets. For the discerning minimalist iPhone 5 user, the Vaultskin
Slim Leather Wallet Case handles this task
stylishly.
www.touchofmodern.com
FREE
$24.95
FREE
FREE
$24.99
>
>
Write Anywhere Inka Pen
Although the ability to write upside down,
on any surface and with waterproof ink
doesn’t seem quite as urgent as it did when
Mini Briefcase Business Case
The next time you reach into your pocket
to procure a business card, pull out the Mini
Briefcase Business Case and transact the
exchange with a little panache.
www.thinkgeek.com
>
Kingsoft Office 5.5.4
This Android-based App offers an array of mobile Office
features built into a slick UR interface. With this device you
can CREATE, VIEW, EDIT and SAVE Microsoft Word, Powerpoint
and Excel files on the go. Best of all is the price tag: Free!
>
I was 9 years old, this device still seems like
an attractive purchase. The creator of this
pen reportedly spent years as an engineer
developing devices for the U.S. military and
NATO. And now in this post-war climate of
industrial free-market ingenuity, we common citizens are graced with this technological wunderkind.
www.readerscatalog.com
>
Plug Hub
This handy device goes a long way towards
tidying up the underside of your desk.
Never fall prey to the tangled hoard of
unsightly chords that commonly spring
forth from the under-desk power-bar. That
situation is typically as annoying as it is
potentially dangerous. This gadget tucks
everything away in a neat and ordered
manner, storing the extra cabling internally.
www.thinkgeek.com
Pixlr
This handy bit of software emulates many of the vital features
in Photoshop and enables the user to edit their cell photography “in-phone”.
>
>
>>
$11.99
RebelMouse
This software collects your Facebook, Google+, Twitter and
Instagram content and lays it out in a single, interactive scrolling page.
outlook 37
snapShots
2013 Quarter Century Club
The Quarter Century Club held its annual
general meeting on May 10. This annual
dinner event celebrates and honours the
men and women who have achieved 25 years
of active CGA membership.
38 outlook
Top: This year, 185 CGAs qualified
to join the celebrated 25-year
club and another 18 qualified for
the 50-year club.
Bottom left: Barbara and Ian
Clark, CGA
Bottom right: Quarter Century
Club Chair Bill Schulz, CGA; his
wife Luise, and CGA-BC CEO
Gordon Ruth, FCGA.
Top left: Art Stavenjord, CGA, Henry
Schmidt, CGA, and Richard Long, CGA, were
honoured as new Members Emeriti.
Bottom left: Patricia Chang, CGA, and
Stanley Chang, CGA, Member of CGABC’s Board of Governors.
Middle left: CGA-BC First Vice-Chair David
Sale, FCGA, and Quarter Century Club Chair
Bill Schulz, CGA.
Top right: CTV Morning Live Weathercaster Marke Driesschen served as
master of ceremonies.
Bottom right: CGA-BC Chair Candace
Nancke, FCGA and Gabrielle Loren,
CGA, co-founders of Loren Nancke &
Company
outlook 39
partingshot
In each issue of Outlook, we profile a notable member or CGA student.
We recently spoke with Lorrie Sipka about her career, family, thoughts
on social media, the impending accounting merger and her role as an
occasional reality TV star. When it comes to juggling diverse roles, Lorrie
is an expert.
Lorrie Sipka, CGA
Controller, Cupcakes by Heather & Lori and File Reviewer for the CGA firm
Broadbent Girard LLP, located in Lac La Biche, Alberta.
What led you to the world of
cupcakes?
After my first maternity leave in
2004, I started working for a CA firm
that provided outsourced controllership. Cupcakes by Heather & Lori
was a new client for the firm and it
was assigned to me. I helped set up
the company’s accounting systems
when they were just one store on
Denman Street and then provided
bookkeeping and controllership
services on an ongoing basis
throughout the company’s expansion to three corporate stores and
its eventual growth into franchising. Heather and Lori had big plans
for expansion and needed the
expertise of qualified accountants
to get them there.
What are some of the
particular business challenges
associated with working in
this niche industry?
The retail bakery industry is tough.
It may smell good and taste even
better, but the margins are tight.
It’s all about volume and location.
You need to sell enough at the
right price to cover your fixed costs,
and having a good location with
great product quality will get you
the volumes you need. I monitor
labour costs and margins closely,
and continually provide feedback
to management on performance.
As with any small business that
has aggressive expansion plans,
cash flow is a concern, but we have
weathered the first ten ‘tough’ years
and are now seeing the benefits of
all our hard work.
40 outlook
What’s your favourite cupcake
flavour?
The coconut cupcake called
“Koo-Koo” is my favourite, but I
usually grab a pack of 12 minicupcakes as I can never choose
just one!
What’s the best-selling
cupcake?
Red Velvet is very popular.
Have many celebrities
frequented Cupcakes by
Heather & Lori?
Yes. I know that musician Bif Naked
and Tom Cruise’s ex-wife Katie
and her daughter Suri Cruise were
regulars.
What would people be
surprised to find out about
cupcakes?
There’s no surprise. They look good
and taste even better!
It seems like a sudden wave of
local competitors started up
in Vancouver a few years ago.
Yet most didn’t survive. What
were the secrets of success that
enabled Cupcakes by Heather
& Lori to weather the market
competition?
A few years back there was a retail
cupcake franchise competitor in
town from the B.C. Interior, as well
as competition from some smaller
local bakeries. We welcomed the
competition as it motivated us to
focus on product quality, customer
service and building the Cupcakes
brand. It was a healthy experience
OF
NE
1
DE
T
P
RI
HE
What was it like to be on
reality TV?
I was in a few episodes as the ‘voice
of reason’ when Heather and Lori
got some crazy business idea or
needed to re-focus on the numbers. I was a little nervous at first
because there was no script, but it
was just like having one of our ‘real’
conversations about the finances –
there just happened to be a whole
film crew present.
Is it hard to work in a field
where you’re surrounded by
delicious snacks? How do you
keep that in check? Is it like
being an Ooompa Loompa
at Willy Wonka’s Chocolate
Factory, or is your workspace
located well away from the
physical product?
I just brought cupcakes home with
me today, so yes I do enjoy them
from time to time. It’s all about
balance. I eat cupcakes, but I also
jog with my dog regularly and
try to eat well to make up for it. I
started juicing, which has amazing
health benefits. It does help that I
work from home so I’m not subject
to the delicious aroma every day.
It would be too distracting to have
an office space at the back of a
bakery – plus there is just no room.
So I only come into the corporate
store for meetings and the paperwork swap.
O
OF O
for us and we’ve learned from it. I
have to admit that it helped that
we had a Gemini-winning reality TV
show called The Cupcake Girls that
ran for three seasons. Our customers could see what it’s like behind
the scenes in our bakeries, and the
show made Heather and Lori relatable. The TV show is off the air in
Canada and the US, but it still airs in
over 90 countries worldwide.
F ON
E
1
O NE
You are also a File Reviewer for
a CGA firm in Alberta. How did
an ex-Ontarian located in B.C.
fall into that position?
Although most of my career has
been in industry as a controller, I do
have experience in public practice.
One day last summer I got a call
from my former CA employer who
wanted to refer me to an Albertabased CGA firm that needed help
keeping up with the northern
Alberta boom. And I said yes. So
I now review files and tax returns
that the accountants prepare, and
pass them on to the partners. I’m
also going to help them set up outsourced controllership services. The
timing couldn’t have been more
perfect because I had just switched
to part-time with Cupcakes and
was ready to take on new challenges. And as a work-from-home
position reviewing paperless yearend files, I didn’t have to relocate.
It was really a dream come true. I
couldn’t be happier.
You’re a busy working mother
with two separate accounting
positions. What’s your system of
work/life balance?
Working from home and having the
flexibility to make my own hours
helps tremendously. While the kids
are in school, I have peace and
quiet to get the work done and,
if needed, work more in the late
afternoons and evenings to meet
deadlines. For most of my kids’ lives
I’ve been working from home so
they are used to it. They know not
to interrupt mommy when deadlines are tight (and go bug dad
instead!). I tried the traditional nineto-five once for about a year and
we were all miserable. We prefer it
this way. The only challenge now is
that when the kids get home from
school they hog all the bandwidth!
It’s time for us to upgrade to ultra
high-speed Internet.
What’s your favourite aspect of
working from home?
It’s really the flexibility, as well as the
opportunity to work with a range of
great people. Heather and Lori are a
joy to work with at Cupcakes and it
never gets boring. We have a level
of trust that has grown through
the years that is second to none.
And the CGA firm in Alberta is also
run by two great ladies. I think the
key is that I’m not micromanaged.
Everyone knows I will get the job
done right and on time, and that
I track my hours fairly. No one is
breathing down my neck and that’s
the best part. Oh and no commuting! That’s also a bonus.
What are some of the main
challenges?
Obviously working from home
does have its challenges. Sometimes I just can’t stop myself, and
I work too much. When the work
is easily accessible at home, it can
be tempting to do too much and
neglect the needs of my family. As a rule, I never work on the
weekends, but it’s not uncommon
to be working away until 10 p.m.
on a weeknight. On the other hand,
you also need to have the discipline
to work on those days you don’t
feel like it. When I’m feeling a little
homebound and just need to get
out, I hop in the car, run an errand
in the middle of the day and grab
a Caramel Macchiato at Starbucks.
That’s the joy of it, as I can do that
without feeling guilty: there isn’t
anyone hovering over me monitoring what I do.
I note that your Twitter account
has but a single tweet. That
certainly qualifies you as a light
social media user. What are your
thoughts on social media as a
whole?
I’m more of a Facebook user and
I have a profile on LinkedIn, but
that’s about it. I don’t get tweeting and hashtagging this and
that. Social media is fun, but scary
at the same time. As my kids are
increasingly online, I worry about
child predators, cyber bullying and
the other negative aspects of social
media and our youth.
You relocated from Ontario to
Surrey, B.C. in 2009. What are
the biggest differences you find
between the provinces? Where
did you live in Ontario? What do
you miss most?
I really miss my family. I’ve been back
and forth between the two provinces since my early 20s. I completed
my CGA studies in B.C., but after
graduating in 2004 I moved back to
Ontario thinking that being closer to
family would make life with children
easier. Not so much, as it was the
same challenge but different weather. I was born and raised in Newmarket/Aurora but lived in Brampton
for the five years between 2004 and
2009. The funny thing is that during
that five-year period, I never worked
for an Ontario employer. I continued
to work at the CA firm based out of
B.C. as an outsourced controllership
for B.C. based businesses. This was all
performed remotely from my home
office in Ontario, so I never really
‘left’ Cupcakes and B.C. In 2009, my
husband and I relocated the family
back to B.C.
Last book you read?
The Female Brain by Louann Brizendine.
Last movie you saw?
Epic (with my two kids).
outlook 41
morethanNumbers
STRENGTH IN
NUMBERS
Number of Certified
General Accountants in
B.C.:
10,853
Rank of CGA-BC in terms
of largest professional
associations in B.C.:
8
Approximate number of
combined members of
CPABC:
27,000
Rank of CPABC among
largest professional
associations in B.C.:
2
(Note: The College of Registered
Nurses ranks first in B.C. with
35,410 members.)
BECA
PIPELINE POLITICS
Percentage of Canada’s
natural gas and crude
oil production that is
currently transported by
pipelines:
97
Barrels of crude oil
transported by pipeline
in Canada every day –
the equivalent of 200
Olympic-sized swimming pools:
3 million
Number of rail cars that
would be required to
transport 3 million
barrels of crude
oil each day:
Length in
kilometres of a train
with 4,200 rail cars:
75
Percentage of liquid
petroleum product
transported safely by
pipelines between
2002 and 2011:
99.9994
The amount of liquid
spilled per million litres
transported by pipeline
in Canada between
2002 and 2011:
5.5 litres
4,200
USE IT
’S T H E
RE
Height in feet of
Mount Everest, the
world’s tallest
mountain:
29,029
Number of years since
Edmund Hillary and
Tenzing Norgay
completed the first
successful summit
ascent:
60
Age of Japanese
climber Yuichiro Miura
who is the oldest
person to reach the
summit:
80
EVERY COLOUR OF THE RAINBOW
Number of colours in a
box of Crayola crayons
in 1903:
8
Number of
Crayola colours
in 1949:
48
Number of
Crayola colours
in 1993:
96
Number of
Crayola colours
in 2013:
120
Source: Business in Vancouver; Canadian Energy Pipeline Association; National Geographic Magazine; ABC News; New York Times Magazine.
42 outlook
Certified General Accountants
We’ve made Private Health Services
Plans cookie-cutter simple!
Recent Revenue Canada (CRA) Federal legislation now allows business owners
to fully tax deduct 100% of their healthcare costs as a business expense using
a Private Health Services Plan.
Who qualifies?
Anyone who owns a business of any size, employees and dependents.
No health questions or age limits. This is not insurance..
What’s covered?
100% of virtually all dental and medical expenses. Visit our website
www.trustedadvisor.ca for a complete list
What’s the cost?
There is a one-time set-up fee plus applicable taxes. The additional cost is 10%
administration fee plus applicable taxes, depending on which province you live in.
Who uses a Private Health Services Plan?
Business owners who:
> do not qualify for group insurance or find it too expensive
> find group insurance coverage too restrictive; i.e.; orthodontics
> have sick child or spouse
> want front of line treatment
> want to write-off child support relating to healthcare expenses
> large groups who have been struggling with significant cost
increases each year.
A partial list of qualified expenses:
Acupuncture
Alcoholism Treatment
Ambulance
Anesthetist
Attendant Care
Birth Control Pills
Blood tests
Catscan
Chinese medicine
Chiropractor
Crowns
Dental Treatment
Dental Implants
Dental X-rays
Dentures
Dermatologist
Detoxification Clinic
Diagnostic Fees
Dietitian
Drug Addiction
Therapy
Eyeglasses
Fertility Treatments
Guide Dog
Hair Transplant
Hearing Aid and
Batteries
Hospital Bills
Insulin Treatments
Lab Tests
Laser Eye Surgery
Lodging (away from
home for outpatient
care)
MRI
Naturopath
Nursing Home (incl.
board & meals)
Optician
Oral Surgery
Orthodontist
Orthopedist
Osteopath
Out-of-Country
Medical Expenses
Physician
Physiotherapist
Prescription Medicine
Psychiatrist
Psychologist
Psychotherapy
Registered Massage
Therapy
Renovations &
Alterations to
Dwelling
(for severe &
prolonged
impairments)
Special School Costs
for the Handicapped
Surgeon
Transportation
Expenses (relative to
health care)
Viagra
Vitamins (if prescribed)
Wheelchair
X rays
Note: This is a partial list. All allowable
expenses must qualify as outlined in the
Income Tax Act
Why are your clients doing this
with their healthcare expenses?
When they could
be doing this!
Healthcare Costs $1600
Healthcare Costs $1600
(3% of net income) Deduct $1500
Admin Fee (10%) $ 160
Available for credit $100
Tax-deductible total $1760
Tax Credit* $25
Tax Deduction $1760
EXAMPLE:
Net income of $50,000 per year with family medical expenses of $1600
*Based on a combined Federal and Provincial rate of 25%.
Be the one to advise your
clients...or someone else will.
The Robinson Group Inc.
June Borlé: 604.874.4429 Fax: 604.873.5600
Toll Free: 1.888.880.2266 Email: june@trustedadvisor.ca
www.trustedadvisor.ca
But it’s who
you know that
really counts
She came to us.
Shouldn’t you?
VANCOUVER | CALGARY
604-682-8367
1800 - 777 Hornby St., Vancouver
www.angusone.com