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Dangerous liaisons Assurance: the Unlocking the with fraud 42 big bang, II 46 audit value 48 March 2012 www.camagazine.com CA goes off road for a cause P. 6 Execs predict growth P. 7 Future retirees may have to adjust expectations P. 10 Don’t worry, we happy P. 10 A few words on statements P. 30 THE SECOND 40062437 R09829 o. COMING The baseball boss is back. Have glory days returned? Paul Beeston, president Publications Mail Agreement N Mail Agreement Publications and CEO of the Blue Jays 12marCover.indd 1 1/31/2012 11:28:26 AM Job Desc.: AIC Tomorrow Ad Docket: AIOC0053 Client: AIC Supplier: Type Page: 7" x 10" Trim: 8.125" x 10.875" Bleed: 8.375" x 11.125" Screen: Pub.: CA Magazine Colour: CMYK Date: Jan 13, 2011 Insert Date: March Issue 2012 Ad Number: AIOC0053-CA-FP-4C-E-Tomorrow DKT./PROJ: AIOC0053 ARTWORK APPROVAL Artist: Studio Mgr: Production: Proofreader: Creative Dir.: Art Director: Copywriter: Translator: Acct. 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Visit www.aicanada.ca Advisory Services | Consultation | Due Diligence | Feasibility Studies | Valuation REAL VALUE EXPERTS AIOC0053_CA_FP_4C_E_Tomorrow.indd 1 12-01-13 3:35 PM FROM THE EDITOR March 2012 Volume 145, No. 2 Editor Okey Chigbo Art director Bernadette Gillen Associate art director Kevin Pudsey What end-users want Senior editors Bernadette Kuncevicius Tamar Satov Associate editor Yvette Trancoso Financial statement preparers would be wise to pay attention Assistant French editor Marie-Josée Boucher Editor, Web edition Margaret Craig-Bourdin to what investors, analysts and journalists are asking for Magazine Web producer Alan Vintar Editorial assistant Harriet Bruser Director of translation Suzanne Mondoux Contributors Steve Brearton Michael Burns, MBA, CA Jim Carroll, FCA ith capital markets today exhibiting all manner of turbulence, investors Marcel Côté John Tabone, MBA W would love to get financial reports that tell them what they need to know in Technical editors and advisers: a concise, user-friendly and transparent manner. But the talk lately is that many us- Assurance Yves Nadeau, CA Business valuation Stephen Cole, CBV, FCA ers find financial reports and statements difficult to grasp and think they obscure Education Karim Jamal, PhD, FCA Finance Peter Hatges, CA,CBV, CF relevant information. This raises the question: what specific criticisms do users Fraud David Malamed, CA·IFA, CPA, CFF, of financial information have about the CFE, CFI Insolvency Peter Farkas, CBV, CIP, FCA way it is presented? What do they want Legal issues Jo-Anne Demers, BA, LLB to see? We sent writer John Lorinc to find People management Carolyn Cohen, MSW, CA Personal financial planning Garnet Anderson, CFA, CA out. In “A few words on statements” (p. Practice management Stephen Rosenhek, MBA, CA, CIRP Studies & standards Ron Salole, vice-president, Standards 30), he writes, “Economists have long Taxation Jay Hutchison, CA argued that transparency encourages Technology Yves Godbout, CA·IT, CA·CISA the efficient allocation of resources in Publisher Cairine M. Wilson, MBA global capital markets. But in the post- Sales and marketing manager Brian Loney (416) 204-3235 [email protected] Enron push for more and better disclo- Advertising sales manager Bruce Feaver (416) 204-3254 sure, did securities regulators and ac- [email protected] Quebec advertising Serge Gamache (450) 651-4257 counting standards boards unwittingly representative [email protected] Advertising Darcey Romeo (416) 204-3257 accomplish the opposite effect?” This is representative [email protected] a story that members of the profession Advertising coordinator Michael Marks (416) 204-3255 Circulation manager Annette DaRocha (416) 204-3367 should pay particular attention to. What do the end-users — investors, financial CAmagazine Editorial Advisory Board Doug McPhie, FCA, Chair Blair Davidson, FCA analysts and financial journalists — of Margaret Albanese, CA Phillip Gaunce, CA their products think about how they are Nancy Cheng, FCA Michel Magnan, FCA presented? Their answers will surprise CAmagazine is published 10 times a year (with combined issues in January/ many. The accompanying sidebar is also February and June/July) by the Canadian Institute of Chartered Accountants. Opinions expressed are not necessarily endorsed by the CICA. Copyright 2012. of interest since it reports on academic research into the connection between Toronto: 277 Wellington St. West, Ontario M5V 3H2 clarity of disclosure and financial performance. It is certainly worth reading. Tel. (416) 977-3222, TDX 103, Fax (416) 204-3409. Torontonians and perhaps many Canadians remember with fondness the Montreal: 680 Sherbrooke St. West, 17th floor, Quebec H3A 2S3. Tel. (514) 285-5002, Fax (514) 285-5695. glory years of the Toronto Blue Jays — Canada’s team — when the baseball club Subscription inquiries: Tel. (416) 977-0748 or 1-800-268-3793 won pennants, was a perennial contender for the World Series and eventually did Fax (416) 204-3416 On the Internet: http://www.camagazine.com a repeat win in 1992 and 1993. At the time in question, CA Paul Beeston was pres- Email: [email protected] ident and CEO; he later left to head Major League Baseball and some other stints. [email protected] [email protected] In 2008 Beeston returned to lead the organization as president and CEO, and all Annual subscription rates: $28 for members; $25 for CA students; $47 for non-members. baseball fans cheered. Paul Brent went to the Rogers Centre in Toronto to talk Single copy, $4.75. Outside Canada: $72 for a one-year subscription; $6.50 for a single copy. GST of 5% applies to all domestic subscriptions. For subscription inquiries, call to and profile Beeston for our cover story this month. Brent writes: “While his (416) 977-0748 or 1-800-268-3793 from 9 a.m. to 5 p.m., Monday through Friday; fax: ebullient personality has made him one of the most popular executives in Major (416) 204-3416. GST registration number R106861578. Publications Mail Agreement No. 40062437. PRINTED IN CANADA: Return undeliverable Canadian addresses to: League Baseball, it is Beeston’s sober accounting skills that have made him a CAmagazine, Canadian Institute of Chartered Accountants, 277 Wellington Street West, Toronto, Ontario. M5V 3H2. CAmagazine is a member of the Canadian Business treasure for his corporate owners at Labatt and more recently Rogers.” Read more Press and Magazines Canada. Submissions: CAmagazine receives from time to time unsolicited manuscripts, including letters to the Editor. All manuscripts, material and about this fascinating and accomplished man in “The second coming,” p. 20. other submissions to CAmagazine become the property of CAmagazine and the Canadian In “The central flaw of ‘good governance’ ” (p. 56) our indefatigable controver- Institute of Chartered Accountants, the publisher. In making submissions, contributors agree to grant and assign to the publisher all copyrights, including, but not limited to, sialist Marcel Côté stirs up more controversy about governance and how it can be reprints and electronic rights, and all of the contributor’s rights, title and interest in and to the work. The publisher reserves the right to utilize the work or portions thereof improved. He takes aim at the media and points out where it does a disservice to in connection with the magazine and/or in any other manner it deems appropriate. No shareholders. part of this publication can be reproduced, stored in retrieval systems or transmitted, in any form or by any means, without the prior written consent of CAmagazine. This issue also has regulars on taxation (“Leveraging the lode,” p. 38); fraud (“Dangerous liaisons,” p. 42); assurance (“The big bang II,” p. 46); and standards (“Unlocking the value,” p. 48). Okey Chigbo, Editor CAmagazine March 2012 1 12marEditor.indd 1 1/26/2012 8:05:51 AM Contents upfront 4 MAILBOX 6 PEOPLE Mexico may be laid back, but the Baja 1000 race, which covers 1,000 miles, is anything but. So when BC native Kane Fraser took on the challenge of the annual off-road race, not only was he competing to raise money for the Rick Hansen Foundation but he also wanted to raise awareness about people with disabilities 6 NEWS AND TRENDS Easy savings for small business • CA execs predict growth • How do I know if a prospective hire lied on his or her résumé? • Numbers game • Going concern 30 10 BITS & BITES Future retirees: adjust your expectations • Don’t worry, we happy • Best bosses features • Executive profile • Increase for internal auditors 20 The second coming Paul Beeston’s return as head of the Blue Jays in 2008 was heralded columns by the team and fans alike. But is it the bottom of the ninth or the middle innings? Whether he stays or goes, the longtime baseball 1 FROM THE EDITOR executive wants more fans in the seats and more victories on the field What end-users want BY PAUL BRENT 12 NETWATCH Is your name within your domain? 14 WORK IN PROCESS 30 A few words on statements System selection, done right — Part 2 What do users of accounting information think about how it is 56 OUTLOOK presented? Clutter in financial reports is a problem, according to The central flaw of “good governance” the UK Financial Reporting Council.