Tapping into the power of social media and Publ… · How to succeed in social media - some tips to...

Important message from the PresidentChanges expected in the assurance worldPersonal services business rulesTransitioning clients on retirement

In this issueHow to succeed in social media - some tips to help you create and maintain an effective social media campaign

On the Cover

May 2012

Tapping into the powerof social media

Life is all about changes. In your job, in your family and in the lifestyle you’re determined to protect. At CA Insurance Plans West, we provide one important thing that won’t change: solid insurance coverage from people who want the changes in your life to come easily. Whether you’re adding to your family or going out on your own in business, we promise to make tomorrow as secure and comfortable as today. It’s in our nature. And in our name.

WE COVER EVERY MOVE YOU MAKE.

Visit caipw.ca or call 1.800.661.6430

contents

8

On the Cover

How to Succeed in Social Media (and Why It Matters)

4 Notes from the President An important message to

members

6 Research Corner The fundamentals of charities

and their taxation 18 Tax Traps & Tips Independent contractors

and changes to the personal services business rules

20 PD News Spring/summer PD

highlights

22 Plugged In News for and about members

& students Eventannouncements BecomeanICABCleader

26 For the Profession Transitioning clients on

retirement – things to consider

12Significant Changes Expected in the Assurance World Discussing the implications

for Canada at the CPAB

Audit Symposium

14Coping with Stress Some helpful strategies

16Member Profile Richele Frank, CA, gets set

for a triathalon in Spain

Want to get the word out?

Advertise in Beyond Numbers!

Here’s why:

90% of BC CAs surveyed read

BeyondNumbers

BeyondNumbersgoes out to

more than 9,000 members,

more than 1,800 students,

and over 200 external

stakeholders—including

other institutes, associations,

and professional organizations

BeyondNumbers has won

awards for both content

and design, including

Blue Wave Awards of Merit

from the International

Association of Business

Communications – BC Branch

To place an ad in

BeyondNumbers, contact our

representatives at:

Advertising in Print200 - 896 Cambie StreetVancouver, BC V6B 2P6

Tel: 604-681-1811Fax: 604-681-0456

Email:[email protected]

Coverimage:moodboard/CulturabyGettyImages.

Life is all about changes. In your job, in your family and in the lifestyle you’re determined to protect. At CA Insurance Plans West, we provide one important thing that won’t change: solid insurance coverage from people who want the changes in your life to come easily. Whether you’re adding to your family or going out on your own in business, we promise to make tomorrow as secure and comfortable as today. It’s in our nature. And in our name.

WE COVER EVERY MOVE YOU MAKE.

Visit caipw.ca or call 1.800.661.6430

4 ica.bc.ca May 2012

May 2012, No.503Published eight times annually by the

Institute of Chartered Accountants of British Columbia.

EditorMichelle McRae

Design Blindfolio Design

604-761-9212

AdvertisingAdvertising In PrintPhone: 604-681-1811Fax: 604-681-0456

Senior Director of Member Services & External Affairs

Amy Lam, CA

Institute CouncilLenard F. Boggio, FCA

President

Gordon Holloway, FCA1st Vice-President

Karen Christiansen, CA2nd Vice-President

Michael Macdonell, CATreasurer

Rosemary Anderson, CAOlin Anton, CABarbara Brink

Don Coulter, CAJohn Crawford, CAJohn Gingell, CA

Andrew (Sandy) Hilton, CADavid Hughes

Roland KruegerDan Little, FCA

John Mackenzie, CASheila Nelson, CA Ben Sander, FCA

Eric Watt, CA

Chief Executive OfficerRichard Rees, FCA

BeyondNumbers is printed in British Columbia and

mailed eight times annually to more than 9,000

chartered accountants and more than 1,800 CA students

in public practice, industry, education, and government

service throughout BC, Canada, and other countries.

BeyondNumbers’ editorial and business offices

are located at:

Suite 500, One Bentall Centre, 505 Burrard St., Box 22

Vancouver, BC V7X 1M4

Phone: 604-681-3264

Toll-free in BC: 1-800-663-2677

Fax: 604-681-1523

Internet: www.ica.bc.ca

Opinions expressed are not necessarily

endorsed by the Institute.

BeyondNumbers supports the CA profession in BC

by sharing news from the Institute and news about

members, by sharing viewpoints on issues of specific

interest to members, and by promoting member

involvement in Institute activities.

Publications Mail Agreement No: 40062742

We are nearing the end of what has been an incredibly challenging and interesting journey for our profession and our Council. Having carefully considered input received from the membership and various other stakeholders, your Council is unanimous in recommending unification in BC as part of a national initiative if the Chartered Professional Accountant (CPA) designation emerges as the predominant accounting designation across Canada. We believe this is the time to join together to build the future of our profession.By now, you should have received an email regarding the release of our draft

report to government with recommendations, as well as an important link to the member voting site (the link can also be found on our website at www.ica.bc.ca). Council asks you to take a few moments to read the report and make your views on unification known. The voting site is open from May 1 to 18, 2012.We will consider the results of the vote, the views of other stakeholders, and

what is happening across Canada when finalizing our report and recommendations to the BC government. The final report will include the results of the member vote.We anticipate that the BC government will use the background material and

recommendations contained in our report to deliberate on next steps, and we will encourage the government to monitor what happens across Canada in the coming months before it makes a decision.

—Len Boggio, FCA

An important message from the president

Notes from the President

I would like to take this opportunity to acknowledge a member of the Institute’s team who has contributed a great deal to the process we have undertaken over the last year. Amy Lam, CA, the senior director of Member Services & External Affairs, will be moving with her family to Hong Kong this summer. Amy has been an invaluable member of the ICABC team during her six years at the Institute, and she will be greatly missed! We wish her well as she embarks on this exciting move!

For more information, contact our Associates at:

Vancouver 1200 Park Place, 666 Burrard Street Vancouver, BC V6C 2X8 Tel: 604.688.7208 Fax: 604.688.7268 Toll Free: 1.800.663.1499

Victoria 3711 Grange Road Victoria, BC V8Z 4S9Tel: 250.727.3445 Fax: 250.479.9716 Toll Free: 1.800.906.5666

www.zlc.net

YOUR TEAM OF EXPERTS INBusiness Family Succession | Employee Benefits | Structured Settlements

Insurance & Retirement Solutions | Private Investment Management

Jack Shaffercfp, clu, ch.f.c.

John McKeachie

Peter G. Lambb.a., clu, tep,

epc, csa

Garry Zlotnikf.c.a., b.comm., cfp, clu, ch.f.c.

Martin Zlotnikb.comm., ll.b

Mark A. Zlotnikc.a., clu

Robert E. Olsonb.a.

H.G. (Howie) Young

cfp

Bruce K. Bergerb.a., cfp

W.A. (Bill) Finlayb.a., c.a.

Ken McNaughtoncfp, clu, ch.f.c.,

rhu, csa

Ross Gibsondip.t

John V.R. Warkb.comm., c.a, cfp,

clu, ch.f.c.

Amin E. Jamala.c.i.i., clu, tep

Michael A. Healeyb.a., cfp, chs

Carrie Lyleb.comm., mba,

cma, cim

Heidi U. Pullemcfp, cdfa

Matthew W.P. Anthonyb.a., cfp

Aeronn Zlotnikb.a.

Nancy Pereiragba

Philip Levinsonc.a.

P.M. (Pip) Steeleb.comm., cfp, clu, ch.f.c.

120423 beyond numbers.indd 1 4/24/2012 4:19:08 PM

For more information, contact our Associates at:

Vancouver 1200 Park Place, 666 Burrard Street Vancouver, BC V6C 2X8 Tel: 604.688.7208 Fax: 604.688.7268 Toll Free: 1.800.663.1499

Victoria 3711 Grange Road Victoria, BC V8Z 4S9Tel: 250.727.3445 Fax: 250.479.9716 Toll Free: 1.800.906.5666

www.zlc.net

YOUR TEAM OF EXPERTS INBusiness Family Succession | Employee Benefits | Structured Settlements

Insurance & Retirement Solutions | Private Investment Management

Jack Shaffercfp, clu, ch.f.c.

John McKeachie

Peter G. Lambb.a., clu, tep,

epc, csa

Garry Zlotnikf.c.a., b.comm., cfp, clu, ch.f.c.

Martin Zlotnikb.comm., ll.b

Mark A. Zlotnikc.a., clu

Robert E. Olsonb.a.

H.G. (Howie) Young

cfp

Bruce K. Bergerb.a., cfp

W.A. (Bill) Finlayb.a., c.a.

Ken McNaughtoncfp, clu, ch.f.c.,

rhu, csa

Ross Gibsondip.t

John V.R. Warkb.comm., c.a, cfp,

clu, ch.f.c.

Amin E. Jamala.c.i.i., clu, tep

Michael A. Healeyb.a., cfp, chs

Carrie Lyleb.comm., mba,

cma, cim

Heidi U. Pullemcfp, cdfa

Matthew W.P. Anthonyb.a., cfp

Aeronn Zlotnikb.a.

Nancy Pereiragba

Philip Levinsonc.a.

P.M. (Pip) Steeleb.comm., cfp, clu, ch.f.c.

120423 beyond numbers.indd 1 4/24/2012 4:19:08 PM


Research Corner

The Fundamentals of Charities and Their TaxationBy Dr. Kin Lo, CA, Ph.D.

A couple of recent events prompted me to revisit a pair of columns I wrote in Beyond Numbers six years ago. The

columns discussed the economic fundamentals of the not-for-profit sector in general (September 2006 issue) and charitable organizations in par-ticular (October 2006 issue), and were based on a research paper I had written with Sohyung Kim (then a doctoral student, and now an assistant

professor at Brock University in Ontario).1 I was motivated to revisit these issues after two events showed me that there are ongoing and funda-mental misunderstandings about not-for-profits and charities.

Who benefits?The first of these events was a discussion with one of my students about a tax policy proposal to support entrepreneurs. In a nutshell, his propo-sal involved giving something akin to charitable donation tax credits to individuals who are willing to donate funds to start-up enterprises to help them succeed.

Such donations are similar to charitable dona-tions in that the transactions are unilateral (the donor does not expect anything in return), and they do occur, as evidenced by “crowdfunding”2 sites such as kickstarter.com and RocketHub.com, which help entrepreneurs and artists solicit funds from the public.3 As someone who has donated through one of these crowdfunding sites, I appreciated the thrust behind my student’s proposal; however, while I found it laudable, I also found it misguided.

1 Kin Lo and Sohyung Kim, “A market

economics approach to taxation and

regulation of non-profit organizations:

Analyses and recommendations for China,”

Asia Pacific Journal of Social Work and

Development, Vol. 17, Issue 1, June 2007.2 Defined as “the practice of funding a project

or venture by raising many small amounts of

money from a large number of people,

typically via the Internet.” (http://oxford

dictionaries.com)3 Not all funds solicited are unilateral transfers.

Some offers have the characteristic of equity

investments (i.e., reciprocal transactions),

which are not the subject of this discussion.

As I explained in my 2006 articles, the fun-damental feature that distinguishes charitable organizations on the one hand, from non-charitable not-for-profits and for-profit enterprises on the other, is whether the organization’s objective is to enhance fairness—the equitable distribution of resources in society—without enriching a select group (owners) in the process. Fairness increases when donors willingly part with their money to benefit others in need. Not-for-profit hospitals and schools, food-banks, and environmental protection organizations clearly fit the bill. By comparison, not-for-profit sports clubs are usu-ally not considered “charitable” because their activities and benefits are limited to their members, and do not extend to the wider community. And, clearly, for-profit enterprises are “for profit” because the owners ultimately benefit from the activities of the enterprise when profits are dis-tributed to them.

The upshot is that providing donation-like tax credits for crowdfunding is not economically justified insofar as the activities of the start-up are not charitable in nature—the owners of the start-up are the ultimate beneficiaries. There may be indirect benefits to society, such as increased employment if the company becomes successful, but that is true for all for-profit enterprises.

Are advocacy and charity incompatible?The second event that prompted me to write this article was the release of the federal budget on March 29, 2012. In this budget, the Finance Minister asserted that some charitable organizations are engaging in excessive amounts of advocacy, and said that the government would provide additional resources to the Canada Revenue Agency to check up on charitable organizations’ spending on advocacy.

The implicit assumption is that advocacy is incompatible with charitable purpose.

What is and is not a charitable activity for tax purposes is currently based on common law, as interpreted by the courts. However, from an economic perspective, I would argue that advo-cacy is a charitable activity. As I pointed out in my articles six years ago, a charitable purpose is one that aims to improve fairness. The aim of advocacy by charitable organizations is, typically, to improve the welfare of those who are unable to speak for themselves. Importantly, the bene-ficiaries of this advocacy may be people living today, but they may also be future generations. And then there are also the non-human mem-bers of the biosphere for which a number of organizations advocate.

While this broader, economic perspective of charitable activity is not current law, the Supreme Court of Canada has, in fact, considered whe-ther providing a “public benefit” is the defining characteristic of charitable purpose. While the Court did not endorse the idea outright (which would have made it law), nor did the Court reject it. Instead, the Court said, “...this would be a change better effected by Parliament than by the courts.”4 Thus, in my view, the budget measures aimed at reducing advocacy are a step in the wrong direction, because they are not consistent with the broader principles and reasons for the existence and operations of charitable organizations.

Not-for-profits and charitable organizations serve important functions in Canadian society and around the world. Legislators would be well served by better understanding the underpinnings of charitable acts so that they do not impose legislation that impedes the vital roles charities play in furthering the welfare of society, as well as the environment in which we live.

Kin Lo, CA, Ph.D., holds the CA Professorship in Accounting in the Sauder School of Business at UBC. The CA Professorship is funded by the CA Education Foundation of BC. Kin welcomes your questions on accounting research, and can be reached at [email protected].

4 VancouverSocietyofImmigrantandVisible

MinorityWomenv.MinisterofNational

Revenue,[1999]2C.T.C.1,asreferencedby

theLibraryofParliament:www.parl.gc.ca/

Content/LOP/ResearchPublications/

prb0590-e.htm#acommon.

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On the Cover

How to Succeed in Social Media (and Why It Matters) By Vanessa Woznow

A clear, meaningful communica-

tion strategy is one of the

best ways to promote your

business. It can attract new partners,

clients, and employees; promote your

company’s products, services, and key

stories; and help you establish a larger

and more diverse communication

network.

Social media should be a key compo-

nent of this communication strategy.

Increasingly, consumers and investors

are using social media to familiarize

themselves with products and services

(and the companies that offer them)

before making the decision to purchase

a product or make an investment.

Having an online presence—and, ideally,

a dynamic one—is an important means

for you to not only engage with these

prospective clients, but also to maintain

contact with existing partners and sub-

scribers.

Providing this level of interaction is

not a frivolous pursuit—it not only

humanizes your brand, it also brings a

level of legitimacy to your business.

Maintaining a current social media

presence shows that you are adaptable

and dependable.

It’s important to remember that

social media isn’t just for big business.

It’s actually a powerful tool for com-

panies of all sizes, and one that offers a

high degree of flexibility, as businesses

can tailor their campaigns based on

their specific goals and resources.

When it comes to creating a social

media strategy, the best approach is

to find what works for you and commit

to it. And as your business grows, so

should your strategy. To maintain a

strong online presence, you have to

evolve.

May 2012 ica.bc.ca 9

Tips for social media successTo help you kick start your campaign, here are some tips:

1. Understand your storyMost businesses create large volumes of content for a variety of communication vehicles—whether these be in print, online, or for use in-house. Social media can be used to highlight and promote these key stories, thereby driving potential clients, partners, and investors to your website.

Knowing what information you want to share, how this information will showcase your com-pany, and who you want to attract, is crucial to creating a coherent, reliable, and popular online presence. This leads us to tip #2.

2. Know your audienceWho is it that you want to connect with through your social media program? Once you’ve identified your target audience, you’ll need to determine the kind of information that will attract them. Research is key here. Figure out what your target audience is looking for, and what will keep them coming back. It is important to understand which websites your target audience is familiar with, and what topics and issues are important to them. Speaking with an accredited social media expert or team is an excellent way to kick-start this process.

3. Do your homeworkIn analysing the habits and needs of your target audience, it’s important to consider the mediums that are most likely to attract them. Should your business have a presence on Twitter? Facebook?

The 3 most popular social media networking sites:FacebookBy the end of 2011, Facebook had 845 million monthly active users, and

approximately 80% of these users lived outside of North America.1

To tap into this global audience, businesses can create their own Facebook

pages and purchase ad space on the site itself. When Facebook users “like” a

company’s page, they automatically get signed up to receive notifications

regarding promotions, news releases, and information updates.

TwitterTwitter is what’s known as a “micro-blogging” platform. It allows users to

create, send, and re-send information posts known as “tweets,” and each tweet

is limited to 140 characters—the same as an SMS (short message service) text.

Businesses can create their own Twitter “handles,” which interested parties

can follow; each time a business publishes a tweet, its followers receive an

update.

By the end of 2011, Twitter had over 300 million users.2

LinkedInLinkedIn is a business-specific social networking website. As of November 2011,

it had more than 135 million registered users in more than 200 countries and

territories.3

Individuals and businesses can create profiles and maintain a list of contacts

(individuals or businesses) with whom/which they share a professional

relationship. These are called “connections.”

The site is geared towards helping individuals expand their networks, find

jobs, and advertise their skill-sets; and helping employers expand their reach,

post jobs, and review potential candidates.

1 Stat from Facebook’s Newsroom (Fact Sheet), http://newsroom.fb.com/content/default.

aspx?NewsAreaId=22.2 http://blog.twitter.com/2011/08/your-world-more-connected.html.3 http://press.linkedin.com/about.

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7. Stand outIf you’re putting effort into your social media campaign, you want to make sure your target audience can find you. To improve your odds, you should optimize your search engine results by tagging your posts and tweets with easily recognizable words, such as: #leadership or #management (tailored to your business, of course).

8. Reuse, recycleIt is perfectly acceptable to repurpose content, as long as the information is still relevant and you’ve put thought into how you’ll be re-using the data. For example, if you re-publish a blog article, you can aim for an alternative angle than when it was first printed by focusing on different information. By doing so, you may be able to tap into a different section of your target audience.

9. Be ready to adaptSocial media continues to evolve, so it’s vital that social media users continue to evolve as well. Be ready to try new things. Keeping up with new social media sites will help you keep your information relevant and expand your reach.

LinkedIn? All three? Should you start a blog? Once you’ve decided which platforms you want

to use, you’ll need to figure out what resources are required to maintain your presence on these platforms. Before launching your campaign, be sure that you understand what is required from your end in order to create, implement, and sustain a meaningful social media strategy.

Specifically, ask yourself: Will I need to hire a co-ordinator? How much time will I be able/willing to allocate to my program? Will I need to take a course to familiarize myself with this new medium? Once you answer these questions, you can start to build your strategy.

4. Have clear goalsWhat are you trying to achieve with your social media campaign? Are you looking for new customers? Are you wanting to develop a foothold in your business community? Are you searching for prospective employees?

Once you’ve answered these questions, you’ll be better able to develop the correct balance between self-promotion and providing intriguing content that inspires your audience. This balance is instru-mental to using social media appropriately—you won’t gather and maintain an audience if all you share is self-promotion.

5. Use multiple media “types”Remember the adage that a picture is worth a thousand words? Social media users enjoy engaging with data in new and interesting ways, especially if you make it easy for them to then share this data with others in their network. “Infographics” (information presented in gra-phics such as pie charts, illustrations, etc.) are great ways to “freshen up” information. Videos, quotes, and interesting tag lines are other ways to grab viewers’ attention. To keep your social media campaign fresh, be sure to explore these different media types, and figure out how you can incorporate them.

6. Create a calendar and update regularlyAgain, there is no point in doing research, strate-gizing, and finding your appropriate platforms if you don’t follow through. Create a calendar and schedule, and stick to it. Your audience will come to expect new content. If you can’t commit to regular updates, there’s really very little point in starting a social media campaign.


If you have a question or

comment about any aspect

of the ICABC’s social media

strategy, please contact

Vanessa Woznow at

[email protected].

10. Be socialTake the time to respond to comments, tweets and re-tweets, likes, and posts. If your audience is taking the time to respond to your content, be ready to let them know that you care about what they’re saying, what they’re looking for, and what they like. Fostering dialogue is a great way to establish relationships, create new connections, and expand your network. If your social media campaign is good, word will spread.

11. Have funTweeting, “Facebooking,” and blogging introduce people to your business—not only in terms of product, but also in terms of corporate culture. Again, these platforms provide a means for you to humanize your brand. You don’t have to tell jokes to create a sense of levity and approachability. Try simply to enjoy interacting with your audience—the more you enjoy the process, the more they will too.

Get in the gameIt has been said that social media is the new “word of mouth” marketing. A strong business strategy that incorporates different social media platforms has the power to introduce your company’s product and services to a new audience.

Just remember to take your time to formulate a plan: Figure out your story, your goals, and your resources. Be engaged. Be engaging. And tweet!

Vanessa Woznow is the manager of public affairs at the ICABC, and leads the Institute’s social media campaign, which includes Facebook and Twitter accounts and the Briefing Room blog (see sidebar).

ICABC – The Briefing RoomOn November 28, 2011, the ICABC launched its social media platform and

blog: The Briefing Room, a resource designed to promote information-

sharing, learning, dialogue, and engagement among our members and the

business community.

Today’s business professionals are living in an increasingly interconnected

world—one that creates both great challenges and great opportunities. As

our global business borders shrink and transnational business connections

increase, our local and provincial economies are becoming increasingly

tied to both international business developments and worldwide economic

volatility. Therefore, it is imperative for our business community—in which

CAs play a vital role—to access the most relevant, up-to-date information

to ensure their success in this constantly changing and increasingly

unpredictable economic landscape.

It was with this goal in mind that we designed The Briefing Room.

We understand that in order to keep up with change, it is the quality, not

quantity, of information that matters. We also understand how difficult it is

to sift through the massive amount of available data and decide what is

nice to know and what is need to know.

The Briefing Room strives to provide the need to know.

Twice a week, we feature articles that provide timely information on

local, national, and international economies, as well as management and

leadership advice and profiles. We also provide ongoing coverage of the

most relevant and up-to-date news for the accounting profession,

including standards updates and regulatory notifications.

Further, ongoing educational features spotlight upcoming courses and

programs, and provide interviews with speakers, course leaders, and

participants of accounting, management, leadership, and IT seminars. The

ICABC’s professional development program is constantly growing as new,

diverse, and exciting courses are added to its lineup, so stay tuned for

upcoming highlights.

We also want to help you get involved. If you’re interested in taking part

in any one of the Institute’s forums or volunteer initiatives, you’ll find the

relevant information, dates, and contacts in The Briefing Room, as well as

interviews with current members and volunteers.

Stay briefed: Check out The Briefing Room daily, weekly, or monthly, or

follow us on Facebook and Twitter @ICABC.

Here’s an example of the kind of up-to-date news you’ll find on the blog:

New Limitation Act introduced in BCNew legislation was recently introduced that will simplify the time

limits for filing civil lawsuits in BC. If passed, BC would move to a

single two-year basic limitation period for all civil claims, and from a

general 30-year ultimate limitation period (ULP) to a single 15-year ULP.

For more information, go to:

www.ag.gov.bc.ca/legislation/limitation-act/2012.htm.


Significant Changes Expected in the Assurance World By Tom Gillespie, CA

On December 2, 2011, the Canadian Public Accountability Board (CPAB)

held its first annual Audit Quality Symposium entitled, “Auditing in the

Decade Ahead: Challenge and Change.” The day-long, invitation-only

session was attended by representatives of the CA profession, various international

regulatory authorities, assurance standard setters, major audit firms, academic

institutions, and public companies. The focus of the session was to discuss inter-

national developments in auditing and their implications in Canada. (The timing of

the symposium coincided with the release of the European Commission proposals

for regulation on the quality of audits of public interest entities.) In addition to

discussing these issues, the individuals in attendance were asked to participate

in an electronic survey, which was comprised of 14 questions relevant to the

discussions. The survey was conducted to gauge participants’ sentiments on the

various issues and proposals.

Among the key topics discussed at the symposium were the three major policy

projects currently under review by the Public Company Accounting Oversight

Board (PCAOB), which oversees firms that audit public companies in the United

States. The following article focuses primarily on these policy projects, and par-

ticipants’ response to them.

A look at the PCAOB’s three major policy projects 1. Changes to the auditor’s reportThe PCAOB’s first policy project proposes four alternatives to the form and content of the standard auditor’s report to increase the infor-mation available to financial statement users and to increase the relevance of the auditor’s report.

One of the alternatives suggested by the PCAOB is implementing a requirement for the inclusion of an auditor’s discussion and analysis section (AD&A) as part of the auditor’s report. The proposed auditor’s commentary section would elaborate on the auditor’s view of the following: • Key risk areas of the audit, including why

they are significant, and the related audit approach;

• Matters concerning the auditor’s indepen-dence;

• Critical accounting estimates and their sus-ceptibility to change, and the underlying assumptions;

• The entity’s critical accounting policies, unu-sual or significant non-recurring transactions, and the basis for the accounting that was adopted.

The PCAOB’s proposed inclusion of an auditor’s commentary section was not supported by all of the participants at the CPAB symposium. During the discussions, concerns were raised about its potential to dilute the work carried out by management. These concerns were reiterated in the electronic survey, with participants identi-fying the auditor’s commentary as the least effective of the proposed changes to the auditor’s report discussed during the day.

By contrast, the survey results showed that the PCAOB’s second proposal relating to the auditor’s report was the most preferred idea of the day. This second proposal is to encourage an expanded use of the emphasis of matter paragraph in the auditor’s report. An emphasis of matter paragraph is not currently a required item in the auditor’s report, but it may be added by the auditors to emphasize a matter regarding the financial statements. The PCAOB is now considering scenarios in which it would become

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a requirement. In a letter to the International Auditing and Assurance Standards Board (IAASB) dated September 29, 2011, CPAB also endorsed the idea of an expanded use of the emphasis of matter paragraph.

Third, in an attempt to produce higher quality information in annual reports, the PCAOB is examining whether auditors should provide assurance on other information outside of the financial statements, such as non-GAAP informa-tion or earnings release.

And lastly, the PCAOB is considering rewording the language to provide additional clarification on the scope of an audit (what it does and doesn’t cover).

2. Increasing professional skepticism and independence The second policy project being undertaken by the PCAOB involves auditor independence and its impact on professional skepticism. The PCAOB reports that it has found too many examples of auditors accepting management’s assertions without exercising sufficient skepticism when con-ducting their audits. A common example used to illustrate this lack of skepticism is auditors relying on third-party pricing sources without establishing how these sources determine fair value.

With regard to this second policy project, the following question was posed at the CPAB symposium: “If the auditor is uncomfortable with a valuation, is it appropriate for them to provide an opinion on that valuation?” It was noted that industry and capital markets may have grown to a point where they can tolerate qualifications in the auditor’s report, particularly when the report involves financial instruments that are difficult to value, such as shares in companies that are not publicly traded and complex derivatives.

In an effort to enhance auditor independence, the proposals being tabled by the PCAOB would subject audit firms to term limits and mandatory rotations on public company engage-ments. The objective of this proposal is to address the concern that the current compensation model for auditors may hinder their willingness to satisfactorily challenge management assertions for fear of losing clients. Therefore, the argument for mandatory firm rotation is that it would free auditors to be more thorough in their questioning of management assumptions and judgments.

In its report on the 2011 inspections of audit quality, CPAB also expressed concern regarding a lack of professional skepticism in auditors’ work. However, in a letter to the PCAOB dated December 19, 2011, CPAB stated that while it supports the PCAOB’s exploration of mandatory

audit firm rotation, a better approach may be mandatory audit firm review. Mandatory audit firm review would require the audit committee to formally evaluate the auditor on a periodic basis, and to report the results of these evaluations to shareholders. These reports could then potentially be used to justify reappointing the same firm or selecting a new auditor. In the survey taken during the CPAB symposium, 90% of the participants agreed that strengthening corporate governance and the audit committee’s supervision of the auditor would be more effective than structural reforms to audit firm rotation.

Since the CPAB symposium, the PCAOB held a two-day public meeting on independence and mandatory auditor rotation. This proposal continues to receive significant backlash from stakeholders, such as CFOs and audit committee chairs. The controversy over mandatory rotation has even prompted the US Congress to consider intervening. In fact, a Republican congressman has introduced a draft bill that would prohibit the PCAOB from requiring public companies to use certain auditors or rotate them. Clearly, this is an issue that is beginning to draw significant attention, and the PCAOB is under pressure to find more palatable solutions.

3. Increasing transparency in the audit processThe final PCAOB initiative discussed at the CPAB symposium involves audit transparency and the possibility of requiring disclosures about the partner in charge of the audit, as is compulsory in some other jurisdictions (Australia, for example). While participants expressed support for greater transparency, some said it was unlikely that partner identification would improve audit quality. The PCAOB is considering additional measures to improve transparency, including disclosures regarding the involvement of other audit firms and specialists involved in the audit.

International developmentsThe IAASB is exploring options for change that are similar to those identified by the PCAOB, including changing the format and structure of the standard auditor’s report, developing an auditor’s commentary, expanding the use of emphasis of matter paragraphs, and reporting on the auditor’s consideration of other information containing the financial statements. Other possibilities being considered by the IAASB involve expanding the scope of the audit or requiring additional assurance reports, such as a report on the quality of corporate governance.

Will Canada pave the way forward?At the conclusion of the symposium, CPAB stated that Canada should develop its own solutions while seeking to influence the world, instead of waiting for solutions from other jurisdictions to be imposed.

The laundry list of policy projects discussed by the various regulators and standard setters at the symposium indicates that change is in the air—both in the United States and internationally—and it is likely safe to assume that the assurance world will experience some significant changes in the decade ahead.

Tom Gillespie, CA, is a professional standards advisor with the Chartered Accountants of BC.

A complete summary of the CPAB Audit Quality

Symposium can be found at www.cpab-ccrc.ca/EN/

content/Audit_Quality_Symposium_Summary.pdf.


Coping with Stress By PPC Canada

and try new things. Negative stress, however, lowers the body’s ability to cope in general— especially with continual exposure.

Recognizing stressStress is a process that builds, so try to be aware of its early signs and make the necessary changes.

Short-term reactions to positive and negative stress include a faster heartbeat, increased sweating, rapid breathing, and tense muscles. Long-term responses to negative stress may include digestive problems, fatigue, increased blood pressure, and/or headaches. At the same time, a person may experience psychological responses such as fear, worry, depression, irritability, or despair. Excess stress can seriously interfere with your ability to perform effectively. It can affect your health, vitality, and peace of mind, as well as your personal and professional relationships.

Helpful strategies for coping with stressEveryone handles stress differently, and some better than others. The art of stress management is maintaining a level of activity that is healthy and enjoyable. Here are some other tips: • Express yourself – We all need someone to talk

to who will simply listen.• Talk it over with yourself – We often have no

control over the unpleasant events that happen in our lives, but we can change what we say to ourselves about these events. All our feelings are greatly affected by what we say to ourselves.

> Avoid: • Catastrophizing: “This is the worst thing

that ever happened to me. I will never re-cover from this.”

• Generalizing: “That person doesn’t like me, therefore, no one will.”

• Projecting: “I’m sure this isn’t going to work out.”

> Instead, practice talking kindly to yourself. Try telling yourself: “I am loved and safe.”

• Start exercising – Walk your dog, go dancing, or join a gym. If you don’t currently exercise regularly, slowly increase your exercise level to include at least 20 minutes of exercise (preferably aerobic), 3-5 times per week.

• Eat healthy – Increase your consumption of vegetables, fruits, nuts, and whole grains. Reduce your consumption of caffeine, refined sugar, and empty carbohydrates. Reduce any con-sumption of alcohol or sedatives.

• Get in touch! Hug someone, hold hands, or pet your companion animal. Physical contact is a great way to relieve stress.

A note from Member Services: The Institute provides its members and students, as well as their immediate family members, with a number of benefits through PPC Canada’s Employee and Family Assistance Program. Most members are aware of the provision of confidential counselling services; however, there are many other free and confidential services available under this benefit program.The PPC series is intended to highlight these services. In the April issue of Beyond

Numbers, we highlighted some quick and clever ways to stay fit right in the comfort of your own office. In this instalment, we offer some helpful tips to help you recog-nize and manage stress in your life.For more information about PPC and your member benefits, visit the ICABC

website at www.ica.bc.ca/ppc. To book services, contact PPC directly at www.ca.ppcworldwide.com or call 1-800-663-9099. To access the online health and wellness tools, use the following log-in: username: “healthy”; password: “living”; key code for e-counselling: “healthyliving.”

Stress is a natural part of life. Life without any stress would be dull and boring, but life with too much of it becomes unpleasant and exhausting. Stress is a physical and psychological response to a demand, a threat, or some kind of problem that requires a solution. It stimulates you and

heightens your level of awareness. The body’s reaction to stress is called the “fight or flight” response, and it occurs whether the stress is

positive or negative in nature. Positive stress (such as the nervous excitement you might experience before trying something new) tends to be temporary, and provides the means to express and pursue talents

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• Practice rest and relaxation: > Take six deep breaths. Breathe slowly and

deeply in through your nose, and out through your mouth.

> Use your imagination to place yourself on the beach, or in some other pleasant place from the past. Close your eyes and imagine the scene in detail, including all of your senses. In just a couple of minutes, you can re-expe-rience the pleasure of actually being there.

> Get at least seven hours of sleep a night, if at all possible.

• Learn to laugh – Rent a comedy and watch it with others (you’ll laugh more).

• Stretch – Here’s a simple one: Stand up. Raise your arms above your head. Stretch your body to the left and hold for four seconds. Stretch your body to the right and hold. Repeat the stretch several times.

• Stop smoking – Although smokers will often say that smoking relaxes them, nicotine is actu-ally a stimulant, and it can increase anxiety.

• Seek professional help – If your stress level is or becomes severe, seek help from a mental health professional who can help you determine the best course of treatment. Don’t try to “white knuckle” your way through chronic stress—reach out and get help.

PPC Canada can help you with your stress!

Did you know that, as member of the

ICABC, you—along with your immediate

family members—are eligible to receive

free professional assistance in trying to

help you become more resistant to

everyday stress?

PPC Canada provides services to

assist with all of life’s challenges. Below

are some of the ways that PPC can

assist you and your family.

• Financial issues: consultation with

certified financial professionals for

issues related to debt management

and financial planning.

• Legal issues: one-on-one

consultations with a certified legal

professional and referrals.

• Nutritional coaching: consultation

and nutritional planning with a

registered dietician.

• Quitting smoking: PPC’s “Quitcare”

program helps individuals to kick

the habit with the help of trained

coaches.

• Counselling services: to assist you

in becoming more stress-resilient, and

to help create strategies to relieve

anxiety.

For the past two years, Richele Frank, CA, has balanced the demands and commitments of her busy career as a tax professional (she’s a partner with KPMG Vancouver, practising in the in-ternational tax group) with an intense triathlon training program. It hasn’t been easy—fitting

workouts into her schedule has meant getting up at 4:30 am several days a week to work out before heading to the office, and rising early on weekends to fit in longer workouts consisting of hours of cycling followed by long-distance runs. For Richele, it’s all worth it.

Member Profile:

Tax and Triathlons – Richele Frank, CA, Strikes a Balance By Michelle McRae

Cycling her way through the lava fields during the 2010 Ironman World Championship in

Kona, Hawaii.


“Instead of sapping my energy, the demanding schedule drives me and forces me to be disciplined with my time,” she says. “It also makes me enthusiastic and more keen to get involved.”

Although she has participated in sports all of her life, Richele only started distance running in her late 20s (she’s now 37), and it was just three years ago that she began competing as a triathlete. To prepare for her first triathlon, which took place in the summer of 2009, she signed up for beginners swim lessons and bought her first road bike. No amount of physical training, however, could prepare her for the controlled chaos come race-day, which she remembers vividly.

“My first triathlon was abysmal!” she says. “Swimming in the open ocean—never mind in a mass of people—was terrifying. And yet, the sense of engagement and support among the Vancouver triathlon community was incredible, and I felt challenged and inspired. I was hooked on the possibility.”

Determined to try again, Richele embraced the idea of tackling another, even more challenging race, and set her sights on the Ironman before even attempting a second triathlon.

“In August 2009, I signed up for my first Ironman distance race, the Ironman Canada in Penticton, BC,” she recounts. “That gave me a year to train for what seemed like an impossibly difficult challenge.”

After a year of hard work, Richele surpassed her expectations—finishing 10th in her age group, and landing a spot at the Ironman World Championship in Kona, Hawaii. Ironman Kona is an annual championship event known for combining three of the toughest endurance races in the three disciplines in a 140.6-mile test of mettle. During the swim portion, athletes have to contend with ocean currents; during the cycling and running portions, they have to deal with difficult crosswinds that can reach 45mph and temperatures that approach 100 degrees (made more intense by a terrain of black lava).*

Undaunted by Kona’s storied history, Richele was eager to compete in the race, which took place in October of 2010.

“There is no question that finishing Kona was the most physically demanding and mentally gruelling thing I have ever done,” she says. “But two months later, I was ready to start training again.”

In November 2011, her long hours of training paid off, with a stellar showing at the Ironman race in Cozumel, Mexico. Her finish time of 10 hours, 18 minutes marked nearly an hour’s improvement over her first Ironman race in 2010. Not only did she do well enough to win her age group—she also ranked as the seventh amateur female overall (16th including the pros) and earned a return ticket to the 2012 Ironman World Championship in Kona.

“This is truly one of the greatest achievements for an amateur long-distance triathlete,” Richele explains. “Kona has a difficult qualifying system and a limited entry. There are typically 100 athletes or fewer in my age group in the world who receive qualifying spots to Kona in a given year.”

Her success in 2011 also garnered her a position on Triathlon Canada’s 2012 Age Group Long-Distance Triathlon Team, which gives her the chance to race for Team Canada at the International Triathlon Union (ITU) Long Course World Championship in Spain this July. She now also has the distinction of having met the eligibility criteria to race as an “elite” athlete.

“To me, success is about being well-rounded—I enjoy being a full-time professional with a challenging and rewarding career too much to contemplate racing at an elite level,” she says. “But it is beyond my wildest expectations that as a late thirty-something accountant who started triathlons only three years ago, I could even contemplate this option. It has made me realize that anything is possible.”

While balancing her career responsibilities with her rigorous training and competition schedule, Richele has also managed to parlay her passion for sports into community service. She regularly volunteers for local sporting events, including the annual Vancouver Marathon and the Scotiabank Half-Marathon, and volunteers as a bike leader for her local triathlon club. In January 2011, she earned a community coaching certificate.

“It is an incredible feeling to help others learn how to ride and get out there in the community to make a difference,” she says.

Richele also serves as co-captain of the KPMG Ride to Conquer Cancer team. In 2011, the firm’s “Keep Pedaling, More Giving” team of 35 raised almost $110,000 for the BC Cancer Agency. The firm’s 2012 team now has a contingent of 80 riders and a collective fundraising goal of over $235,000.

“While competing in races like the Ironman presents the ultimate test of endurance, spirit, and focus, the experience I’ve gained transcends participation in sport,” Richele says. “Certainly, managing and balancing the demands of my career with my enthusiasm for sport is challenging, but it makes me more focused and goal-oriented. Sport also ties me to my community, and enables me to give back while enjoying the things I am passionate about.”

All the best in Spain Richele!

Running at Jericho Beach during the 2011

Subaru Vancouver Half-Marathon (the BC

long-distance championship). Richele won

her age group that day and was the 6th

female finisher overall.

On a side note

AGM Info on the WebOn May 29, 2012, all AGM

meeting material will be

available on the ICABC

website at www.ica.b.ca.


Tax Traps & Tips

Independent Contractors and Changes to the Personal Services Business RulesBy Deborah Graystone, CGA, and Danielle Sideris, CA

Authors’ note: The comments contained herein take into account any proposed amendments

and proposals tabled or released by the Minister of Finance by March 23, 2012.

Incorporating a business can provide a number of planning opportunities and tax benefits. One tax benefit in particular is the small business deduction (SBD). Where the SBD applies, the active business income of a Canadian-controlled private corporation is eligible for special reduced tax

rates at both the federal and provincial levels. Self-employed individuals will often ask their advisors if they should operate their businesses through

a corporation. As their advisors will tell them, a number of considerations must be taken into account when deciding whether to incorporate. Among these considerations are the personal services business (PSB) rules. Generally, if an individual provides services through a corporation and, if not for the exis-tence of the corporation, the individual could be considered an employee of the entity to which they provide the services, the corporation may be considered to be carrying on a PSB. In other words, the individual would be considered an “incorporated employee.”

Income from a PSB is not eligible for the SBD, and in draft legislative proposals released last fall by the Department of Finance, changes have been proposed that would increase the tax liability on in-come earned by a PSB.

In this article, we will discuss what constitutes a PSB and the taxation of PSB income.

What is a PSB?Generally, the PSB rules will apply if the following conditions are met: 1. Income of the business is from services

rendered by an individual, referred to as an “incorporated employee”;

2. The incorporated employee rendering the services, or a related person, is a specified shareholder. Generally speaking, a specified shareholder is a person who (together with non-arm’s length persons) owns—directly or indirectly, and at any time during the year—10% or more of the issued shares of any class of the corporation or of any related corporation;

3. But for the existence of the corporation, the incorporated employee might reasonably be regarded as an officer or employee of the entity for which the services are provided;

4. Throughout the year, the corporation does not employ more than five full-time employees in the business; and

5. The services are not being provided to an associated corporation (since these two corpo-rations must share one SBD regardless).

The key test is really the third condition—whether the individual can be considered an “incorporated employee.” The issue of whether the individual is an incorporated employee is a question of fact, and must be reviewed on a case-by-case basis.

Although a PSB is defined in subsection 125(7) of the Income Tax Act (Act), this determination goes back to common law tests that are used by the courts to determine whether an individual is an employee or an independent contractor. These tests consider: • The degree of control exercised by the hirer

over the duties performed by the individual; • The degree to which the work provided by

the individual is integrated with the busi-ness of the hirer;

• Whether or not the hirer provides the tools to be used to perform the services, and whether the individual has a chance of profit on their activities and the risk of loss; and

• The length of the individual’s relationship with the hirer.

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In recent years, the courts and the Canada Revenue Agency have begun to consider the intentions of both the hirer and the individual providing the services when a working arrange-ment is entered into. No one test will determine whether the individual is an employee or an independent contractor; their status can only be determined by considering and weighing the factors specific to their situation, and the intention test is treated more as a tie-breaker. To avoid the PSB rules, it is important to be considered an independent contractor based on the common law tests.

How is a PSB taxed?The PSB rules were implemented a number of years ago to address concerns regarding individuals who were incorporating to take advantage of lower taxes for corporations, rather than paying higher amounts of tax on employment income at a personal level. However, in the tax rate environment of recent years, there have been planning opportunities for PSBs.

Prior to the release of the legislative proposals on October 31, 2011, PSB income was included in “full rate taxable income,” as defined in sub-section 123.4(1) of the Act, which meant that it qualified for the general business income tax rate. This tax rate has been decreasing in recent years, and most recently decreased from 16.5% to 15%, effective January 1, 2012.

Under current rules (and under the proposals), PSB income is included in the “general rate income pool” (GRIP), and eligible dividends can be paid to the extent of a corporation’s GRIP balance. The tax cost associated with earning general rate business income in a corporation and paying it out to individuals as eligible divi-dends, rather than earning that income directly as an individual, has been substantially reduced or eliminated in many jurisdictions, resulting in tax integration for this type of income. Moreover, there is a significant tax deferral where general business income is retained in the corporation rather than being taxed personally as remunera-tion.

With the reductions to the general business income tax rate, combined with the eligible dividend rules, it could actually have made sense in some cases to incorporate a PSB, as a tax deferral was available without creating a signifi-cant tax cost in most provinces. However, the Department of Finance has proposed that the definition of “full rate taxable income” in sub-section 123.4(1) of the Act should no longer include PSB income, effective for taxation years beginning after October 31, 2011. This means that PSB income would no longer be eligible for

the recent rate reductions on general business income. Instead, PSB income would generally be subject to the federal corporate tax rate of 28% plus the general provincial corporate tax rate.

Under the proposals, this income would still be included in the GRIP; therefore, dividends paid from this income could still be designated as eligible dividends, which are subject to a lower tax rate. However, integration would not be attained. There would be a significant tax cost when earning the income in the corporation and paying it out as a dividend, compared to earning the same income personally. As well, there would be only a small tax deferral associated with retaining the income in the corporation for a period of time.

It is also important to note that subsection 18(1)(p) of the Act restricts deductions claimed by a PSB—this would not change under the proposals. Generally, deductions are limited to salaries paid and employment benefits provided to the incorporated employee. Certain other expenses are allowed, including amounts that are incurred by the corporation in connection with the selling of property or the negotiating of contracts (if these amounts would have been deductible by an employee), and legal expenses incurred by the corporation in collecting amounts owing for services rendered.

Avoiding the PSB rulesTo fully benefit from incorporation, it is important to ensure that a business avoids the PSB rules. In most cases, this means that incorporation will only make sense for “true” independent contractors, and not for incorporated employees.

However, in some cases, organizations will only contract with corporations. In some of these situa-tions, individuals who provide services through a corporation will inevitably be treated as incorporated employees, and the personal services business rules will apply. In these situations, it is likely best for the corporation to bonus out income to the incorporated employee, because this will keep the income from being subject to the 28% federal corporate tax rate, and thereby avoid a significant integration cost.

Deborah Graystone, CGA, is a partner with BDO & Company LLP (Vancouver office), and Danielle Sideris, CA, is a senior manager with BDO Canada LLP (national office).

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• Purchase price allocation • Impairment testing

• Fair value measurement • Financial instruments


Accounting & AssuranceBusiness Valuation - IntroductionThis seminar will provide practical insight into business valuation, including the application of valuation tools, such as multiples and discounted cash flow. It will also focus on business valuation interpretation and the mechanics of the valuation process.May 23, 9am-5pm, Vancouver

PD News Not-for-Profit Organizations – Transition to the New Accounting Standards (Part III)This half-day seminar will provide an overview of the transition issues related to the application of the new accounting standards for not-for-profit organizations under Part III of the CICA Handbook. May 23, 9am-5pm, Vancouver

Not-for-Profit Organizations – The Accounting Standards (Part III)This seminar will provide an overview of the accounting standards for NPOs under Part III of the CICA Handbook, including the new accounting standards. It will review the application of GAAP, with an emphasis on the areas where choices have to be made in the preparation of financial statements.

Those interested in a more in-depth review of the transition issues may prefer to attend Not-for-Profit Organizations – Transition to the New Accounting Standards (see above).May 28, 9am-5pm, Vancouver

Review EngagementsThis seminar will refresh the skill-sets of practi-tioners who complete review engagements. Par- ticipants are encouraged to prepare challenging questions for discussion. While the course will focus on the extensive judgement required to complete a review, some standard checklists will be included to give an indication of documenta-tion requirements.May 28, 9am-5pm, Vancouver

New: IFRS – US GAAP: Update and ComparisonThis seminar will provide an update on the key differences between US GAAP and Canadian standards (IFRS). It will show participants how to identify and apply the main changes to US GAAP, and help them find tools and resources to keep current throughout the year, or enhance their knowledge on a particular topic. May 31, 9am-5pm, Vancouver

Due Diligence for AcquisitionsThis seminar will help participants plan and execute due diligence assignments, identify key issues and risks, and know what to look for when undertaking business and financial reviews. The seminar will focus on helping participants understand the objectives of the due diligence review as part of the overall acquisition or dives-titure process.June 4, 9am-5pm, Vancouver

Spring Conferences

Work/Life Balance ConferenceMay 29, 8:30am-4:45pm Vancouver Convention Centre West

Information Technology Conference June 14-15, 8:30am-4:30pm Vancouver Convention Centre West

CAs in Industry PD DayJune 19, 8:30am-5pmVancouver Convention Centre West

Victoria CA Conference DayJune 21, 8:30am-5pmWestin Bear Mountain Golf Resort & Spa

Our popular conferences provide members with the most efficient way to obtain practical information for use in the workplace. A complete list of topics and conference speakers will be provided in future mailings, as well as on our website at www.icabc-pd.com.

Auditing in the New CAS EnvironmentThis seminar will provide audit practitioners with an overview of the CAS, and information on how to perform an audit in the new CAS environment. Attendees will also learn about the key elements of an engagement working paper file.June 4-5, 9am-5pm, Vancouver

IFRS – Financial Statement Presentation & Note DisclosureThis seminar will provide participants with a solid understanding of the IFRS requirements for financial statement presentations and note disclosures. It will present the disclosure standards by major financial statement area, and will provide a review of relevant standards and a comparison with existing Canadian GAAP.June 4-5, 9am-5pm, Vancouver

New: Understanding Today’s Investment Landscape: A Primer on Hedge FundsThe explosive growth of hedge funds in the US over the last decade is set to spill over into Canada. This seminar will familiarize participants with the common hedge fund structures and approaches. It will aid them in distinguishing between legitimate reasons for using hedge funds and pie-in-the-sky fantasies. June 6, 7:30-9:30am, Vancouver

IFRS – Mining Industry BasicsThis seminar will explain the scope of the impact of IFRS on the mining industry. It will enable participants to apply the accounting and disclo-sure requirements of key IFRS standards.June 6, 9am-5pm, Vancouver

Best Practices for Running Your PracticeThis seminar will provide new ideas on how to operate your practice. Choosing the right types of clients, delivering new services to them that they actually want, and moving to value-based billing are just some of the creative ideas this course will cover. June 11, 9am-5pm, Kelowna

June 12, 9am-5pm, Vancouver

Wealth Management Tools and PracticesThis course will give professional advisors the tools they need to help themselves and their clients develop personal financial plans, collaborate with other professional advisors, and integrate clients’ personal financial planning into their corporate and family affairs.June 12, 9am-12:30pm, Abbotsford

June 14, 9am-12:30pm, Vancouver

Remember that our spring/

summer program provides your

last chance to use your 2011-2012

PD passports, which expire July 31,

2012. There are no carry-forward

provisions for unused portions.

SPRING/SUMMER PD PROGRAMFor detailed course descriptions or a complete schedule of upcoming PD seminars, consult your spring 2012 PD catalogue or visit our website at www.icabc-pd.com. To register, call the PD department at 604-681-3264.


Buying, Selling, or Merging Your Practice– A Guide to Getting the Best Deal PossibleThis seminar will focus on factors that need to be considered in getting the best deal for your practice. It is intended for buyers, sellers, and those who want to find a firm with which to merge. Participants will learn from many case studies and real situations. June 13, 9am-5pm, Vancouver

New: Building Your Own Retirement Pension with AnnuitiesIn this fast-paced, half-day course, the instructor will: explain what an annuity is and review the various types; analyse inflation indexing; discuss how to leave annuity money to heirs if you die young; and provide real examples of annuity rates from a variety of insurance companies in Canada. June 19, 1:30-5pm, Vancouver

New: Strategic Finance for Small-Medium Enterprises (SMEs)SMEs and larger enterprises often face different financial challenges. And yet, it’s just as imperative for SMEs to create a solid financial strategy—one that provides a foundation on which they can successfully meet their objectives.

The purpose of this seminar is to assist SMEs with their financial strategy, management, and decision-making processes. June 25, 9am-5pm, Vancouver

ManagementLost in Translation: Level 1 – An Overview of Business & Social English Language Skills for Accounting Professionals*A business professional’s competency is some-times judged according to their English-language communication skills.

This course will address the challenges faced by many non-native English-speaking professionals. Participants will be introduced to communica-tion techniques and useful phrases.May 22, 9am-12:30pm, Vancouver

*Level 2 will be held June 13, 9am-5pm, in Vancouver.

New: Manage Your Time and Your Life: Resilience and Life BalanceHow can you be fully engaged when you’re exhausted and overwhelmed? This session will help you develop some performance habits that will enable you to recover faster, stay more focused, get clearer, and be more present to the challenges at hand. Invest in a practical, trans-formative day, and come up with your own plan for optimal performance.June 7, 9am-5pm, Vancouver

New: The Mobile Web for AccountantsThis seminar will explore how accountants and financial professionals can prepare and position themselves to take full advantage of the mobile revolution. The information will be especially relevant for those accountants who are expected, increasingly, to stay plugged in at all times, work on the fly, respond immediately, continuously monitor clients, and collaborate at anytime from anywhere.June 8, 9am-12:30pm, Vancouver

June 18, 9am-12:30pm, Abbotsford

June 25, 9am-12:30pm, Kelowna

Leading Through InfluenceThis seminar will help you become more skilled at adapting and building rapport with your team, with colleagues, and with clients. It will give you an understanding of your own personal style, and explain how to read and interpret other personality styles. These skills will become an essential part of your professional toolbox, and will be applicable in any area of your profes-sional and personal life. June 13, 9am-5pm, Vancouver

New: It’s All About the People – Building Your Management Team for Maximum PerformanceWhat’s holding your company back? Could it be your management team? This workshop is geared toward CEOs and CFOs who have taken on the responsibility of human resource manage-ment within their organizations.

This seminar will show you how to manage the managers. You will learn how to find the right managers, how to challenge and motivate them, and how to get them working together towards your common goals. June 14, 9am-5pm, Vancouver

New: Planning to Achieve Competitive AdvantageHow are your sales? How is your net income? If you are not exceeding your shareholders’ expecta-tions, is it because of the “current economic environment,” or is it really because your com-pany has lost its competitive advantage?

This workshop is geared towards CEOs and CFOs of small to medium-sized companies. It will help them take the lead role in developing a strategy and translating it into action steps to gain competitive advantage. June 15, 9am-5pm, Vancouver

New: Brand PerformanceEffective brand performance is essential for gaining and maintaining revenue momentum. This half-day seminar will address business brand management, and provide practical insights into brand principles from an operating perspective. Participants will learn how their new knowledge of brands can be leveraged into creating a new service line.June 15, 9am-12:30pm, Vancouver

New: Building & Leading a High-Performance TeamThe ever-increasing pace and complexity of today’s workplace is driving greater interdependence, making teams and teamwork more vital to orga-nizational success by the day.

This seminar will help participants learn the principles and best practices of optimizing team performance.June 28, 9am-5pm, Vancouver

TaxationAnnoying Basics of Tax One of the challenges for many newly qualified CAs, and for those starting a new practice, is transitioning from the knowledge of what can be done to the execution of what needs to be done.

This seminar will help participants develop a practical approach to dealing with day-to-day tax requirements. June 5, 9am-12:30pm, Vancouver

Tax Issues for the New Client This seminar will provide practitioners with a structured approach to identifying common problems, developing solutions, and building long-term strategies for new clients. June 5, 1:30-5pm, Vancouver

Creative Use of Partnerships in Tax Planning This seminar will discuss the creative use of partnerships in tax planning, and cover some of the more common issues and pitfalls encountered by practitioners. June 12, 9am-12:30pm, Vancouver

New: Canadian Resident Trusts & Estates with Non-Resident BeneficiariesThe objective of this seminar is to help attendees understand the taxation issues and reporting requirements for an estate or trust that is resident in Canada or deemed resident in Canada, where there are one or more beneficiaries who do not reside in Canada. June 5, 1:30-5pm, Vancouver


Plugged In: News for and about members & students

2012 BC AGM ReminderThe ICABC’s 2012 annual general meeting will take place on the afternoon of June 20, 2012, at the Hyatt Regency, 655 Burrard Street, in Vancouver. You will be able to access all meeting material via the Institute website at www.ica.bc.ca effective May 29, 2012.

Members’ Recognition Event – June 20, 2012The 12th annual Members’ Recognition Event will be held at the Fairmont Vancouver Hotel, with the reception starting at 5:30pm, and the dinner and awards presentation starting at 6:30pm. Registration details are enclosed in this mailing.

Yukon AGM Advance Notice 2012 ICAYK Annual General MeetingThe 36th annual general meeting of the Institute of Chartered Accountants of the Yukon is scheduled to take place on the afternoon of June 22, 2012, at the Edgewater Hotel in Whitehorse.

FVCAA Event NoticeThe Fraser Valley CA Association (FVCAA) is pleased to announce the following upcoming event:

June 7, 2012Communication and Soft Skills for the WorkplaceKeynote speaker: Tammy Robertson, MA, of WorkHeart Consulting in Calgary

The event will take place at the Cascade Community Centre in Abbotsford, and start at 8am. The cost for the event is $35.00 and includes breakfast. RSVP to Laurie Daschuk at [email protected].

Announcements


Become an ICABC leader!Call for Council nominations

Effective leadership is vital to the CA profession. It is with

that awareness in mind that the BC Council sets the goals

for the ICABC each year, determining what the Institute

should be doing, for which constituencies, at what cost,

and with what expectations.

Are you, or someone you know, interested in becoming

a leader among CAs? As a Council member, you’ll

focus on the strategic issues faced by our

membership and the profession as a whole—

issues such as education and professional

development. You’ll also get the chance to

expand your skills and your network.

What you’ll gain:

• A chance to help advance your profession

• Access to up-to-date information about the

challenges faced by CAs

• The opportunity to exchange ideas and

perspectives with other leaders in the profession

• Exposure to a wealth of professional and personal

contacts

What you’ll need:

• A demonstrated commitment to the accounting

profession

• A strong background in community and

volunteer work

• Leadership experience

If you or anyone you know is interested in

running for election to Council, you’ll find

the Council Nomination Form on our

website at www.ica.bc.ca under

Member Centre>Forms>Leadership

(choose the Council Nomination Form).


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Classifieds

Employment

LOOKING TO PURCHASE

LOWER MAINLAND - A 3-partner firm looking to expand seeks to purchase a practice or block of accounts. Will consider retirement, succession, or merger opportunities. Contact [email protected]. Confidentiality will be respected.

MERGER OR SUCCESSION OPPORTUNITY Successful mid-size Vancouver-based firm is looking to expand through succession or merger opportunities throughout the Lower Mainland. Reply in confidence to: [email protected].

KELOWNA CA FIRM LOOKING TO EXPAND CLIENT BASEWe are a well-established accounting firm with offices throughout the Okanagan looking to further expand our operations by purchasing existing clients or an existing firm. We offer a wide variety of experiences and a good breadth of knowledge of small to medium-sized business as well as personal taxes. If you are looking for an opportunity to scale down your business or retire, we have experience in office purchases and will focus on making a smooth as possible transition. We will work with you and your clients to make sure the fit is good and that the clients are comfortable with the transition. Please contact: [email protected]. Confidentiality will be respected.

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: [email protected].

SUCCESSION OR RETIREMENT PURCHASEDowntown Vancouver multi-partner firm is looking to expand by assisting with your retirement or succession plan. Please reply to:[email protected].

FINANCE MANAGER FINANCIAL SERVICES

Manage future growth

Combine your strong technical accounting abilities with your experience leading teams of designated accountants for this growth orientated, international US listed company.

This is a senior position requiring extensive US GAAP Public company reporting, budgeting and MD&A experience.

The successful candidate will hold a CA designation with at least 5 years post designated experience and will have worked with complex US listed companies. Ability to lead teams in a dynamic and busy environment is essential. Contact Gavin Ryan for more details at: [email protected] or 604 648 4319

$100,000 - $120,000

SENIOR FINANCIALANALYST

Add value through analysis

One of BC’s largest, publicly traded companies is seeking a talented Senior Financial Analyst to provide value added services to strategic business units through detailed fi nancial planning and analysis.

Responsibilities include monthly performance reporting, budgeting, strategic planning and fi nancial modelling.

The successful candidate will have demonstrable success within an FP&A capacity, coupled with a strong commercial acumen and the ability to engage key stakeholders throughout an organisation.

Contact Tim Pearson for more details at: [email protected] 604 648 4281

$80,000 - $100,000

MANAGER FINANCIAL REPORTING

Entrepreneurial and analytical

Join this dynamic fi nancial services business with operations across Canada. Utilise your strong technical accounting skills with great commercial acumen as you perform a broad range of accounting duties.

Working with the senior management team you will also closely support the decision making with insightful performance related information.

A CA with 2-5 years post designation experience, you have a strong track record of working with dynamic and complex businesses and a desire to grow with a company.

Contact Gavin Ryan for more details at: [email protected] or 604 648 4319

$80,000 - $90,000


For the Profession

When public practitioners plan for retirement, they have to consider how to ensure a smooth and suc-

cessful transition for their clients. Given our demographics and the large number of our members who are at or approaching retirement age, this is a particularly timely issue. I thought it would be useful, therefore, to discuss how practitioners and their firms can work together to ensure a smooth transition for everyone involved.

Let’s imagine a hypothetical practitioner named “Joe.” Joe has worked for many years as a partner at a mid-sized CA firm. On May 1, 2009, Joe states his intention to retire. With his partners’ approval, Joe creates a plan to be fully retired within two years. They all agree that Joe will work regular hours throughout the first year of his retirement phase to help ease the transition of his clients to other practitioners in the firm, and then reduce his work schedule to a maxi-mum of two days per week throughout the second year.

The first year of Joe’s transition into retirement goes smoothly. Still working full-time, he’s readily available to introduce his active clients to his partners, answer any questions, wrap up loose ends, and ensure that a high quality of service is maintained.

Year two is where the story diverges...

Transitioning Clients on Retirement

By Chris Utley, CA

Scenario 1: Rocky roadMary, one of Joe’s tax clients for four years, has one last tax return for the firm to complete before she moves to a new city. Tim, a staff accountant who works with Joe, prepares and files Mary’s 2009 tax return in April 2010, along with a cheque for the taxes owing. The only item outstanding is the receipt of her final assessment from the CRA. After a staffing change, the new staff accountant assigned to Mary’s file, Wilson, informs her that he will be in contact when the final assessment is in—probably within the next three months. Joe considers Mary’s file to be substantially complete.

After May 1st, when his “retirement year” kicks in, Joe starts checking his email and voice mail less and less frequently, and his visits to the office become increasingly sporadic. He becomes even more inaccessible in June, when he leaves for a vacation in Hawaii and tells the firm he’s not sure when he’ll be back. Joe isn’t concerned about Mary’s assessment though—he’s confident in the knowledge that Susanne, the partner to whom he has transferred his tax clients, will look after any final issues that might arise.

Unfortunately, Joe has forgotten that he only ever introduced Susanne to his “active” tax clients. Unbeknownst to Joe, there’s another complication: Wilson leaves the firm abruptly in early June, and a new staff accountant is not assigned to Mary’s file.

In late July, Mary realizes that Wilson still hasn’t contacted her about her assessment. Anxious to tie up loose ends before moving, she calls the firm, only to learn that Wilson is no longer there. She also finds out that Joe is rarely in the office anymore, and that Susanne, the partner who has inherited the rest of Joe’s tax clients, is on vacation for the next three weeks.

Wary of being passed on to yet another staff accountant, Mary emails Joe. She also leaves a voice message. After two weeks with no reply, Mary sends a follow-up email advising Joe that if he does not respond promptly, she will contact the ICABC to figure out her next steps.

Fresh off his vacation, Joe drops by the office at the end of August, and discovers Mary’s messages. He subsequently finds her assessment in a pile of mail, and is relieved to find that the CRA has not assessed any additional tax liability. He immediately contacts Mary and apologises for the oversight. Because the matter is resolved without any financial penalty, Mary decides to let the matter go, but not before expressing her disappointment with Joe’s service.

Joe knows he has dodged a bullet.

Scenario 2: Smooth sailingAs in Scenario 1, Mary’s tax return is submitted in April 2010, the assessment is expected within the next three months, and Joe considers Mary’s file to be sufficiently complete. Here again, Joe starts checking his email and voice mail less and less frequently after May 1st, and his visits to the firm become increasingly sporadic.

This time, however, recognizing that matters can easily arise after a file is completed, Joe ensures that all of his recently completed files are transferred to his partners before heading off to Hawaii in June. In addition, he confirms with his partners that any non-active clients with recently completed files will still have a designated contact at the firm—even in the event of staff turnover.

Moreover, Joe lets the firm know how long he’s going to be in Hawaii, and arranges to have someone monitor his voicemail, email, and hard copy mail. He assures the firm that when he returns from his vacation, he will continue to stay in regular contact, and will check his email and voice mail at least once a week.

Mary receives her assessment in late June from Susanne, while Joe is relaxing in Hawaii, confident that all of his clients are in good hands.

Ensuring a successful transitionWhen clients and their files are being transferred from one individual to another, it can be easy for a client-related matter to be overlooked. By working together with their firms, practitioners like Joe can transition to retirement without lessening the quality of service provided to their clients.

Chris Utley, CA, is the director of ethics for the ICABC.


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