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Inside Internal Controls

News and discussion on implementing risk management

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2013

Employer was not duly diligent and paid the price with health and safety violations

health and safety violation

The Alberta Court of Appeal just dismissed an employer’s appeal and confirmed that the employer did not do all that was reasonably practical in the circumstances to avoid the reasonably foreseeable risks that led to the fatal accident of its employee. The court noted that the fact that the employer would even consider operating a machine that no one had any familiarity with and without either its own operator or a proper set of written instructions in itself spoke volumes as to the lack of the employer’s due diligence in this matter. Therefore, the health and safety violations were upheld.

 

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Stay of execution: A precedential win for a charity at the Federal Court of Appeal

The charities community is well aware that the Canada Revenue Agency (CRA) works to shut down charities it feels are deserving of such a punishment. In some circumstances, notably, but not exclusively, with respect to charities involved in tax shelters, the CRA works to finalize the charity’s revocation within thirty days of its Notice of Intention to do so.

 

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Why should I monitor IT effectiveness and how do I do it?

The two definitive studies by COSO identify monitoring as a critical component of internal control and risk management. Monitoring refers to both ongoing monitoring processes to ensure that a system functions as it is supposed to (including management and review aspects), as well as ad hoc special studies and audits to review the system…

 

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Verdict in Sunrise Propane gas explosion case

A series of explosions at Sunrise Propane’s north Toronto operation in 2010 resulted in the deaths of an employee and a firefighter, forced thousands of nearby residents from their homes and caused millions of dollars in damage. In the aftermath, the company failed to comply with various provincial officer’s orders under the EPA, and at trial the Ontario Court of Justice found the company failed to properly train the employee who died and failed to take reasonable precautions to prevent the explosions under the Occupational Health and Safety Act

 

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To each their own: Provincial rules which apply specifically to charities

Those running a charity could be forgiven for thinking that there are no provincial rules which apply specifically to charities. In fact, this is not the case and we have written several times about such laws as the fundraising rules in Alberta or the registration of a charity in Quebec. However, there are other rules which may affect charities and which may have particular relevance when crossing borders. One such set of rules is contained within the Trustee Acts of various provinces. Generally speaking, the Trustee Acts will apply when a charity holds funds regardless of whether it is incorporated.

 

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Search warrants: what should you do?

Being subject to a search warrant can be unexpected, shocking and upsetting. If served with a search warrant in connection with a government or regulatory investigation, it is essential to contact legal counsel immediately.

 

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What to do if you are a victim of cyberbullying or cyberlibel – Part 2

In this posting, I will provide tips to adults and businesses that are being cyber-libelled. Anyone can be made a target of online defamation, with devastating consequences to one’s personal and professional reputation. Indeed, at its worst, cyber-libel can bring an individual or business to the brink of bankruptcy.

 

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Employee dismissed for cause after breach of privacy policy

In Steel v. Coast Capital Savings Credit Union, the Supreme Court of British Columbia upheld the termination of an employee on a with cause basis after the employee breached the bank’s confidentiality policy

 

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Ontario Not-for-Profit Corporations Act update

So, the Ontario government is taking another step toward implementing the Ontario Not-for-Profit Corporations Act. It has introduced, Bill 85, An Act to amend various companies statutes and to amend other statutes consequential to the Not-for-Profit Corporations Act, 2010, which would make amendments to several existing laws that are necessary before the Not-for-Profit Corporations Act can come into force…

 

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Monitoring controls: The top ten tax controls

At year end, external auditors heading into the tax department do not generally rely on internal controls to reduce testing; a great deal of effort is focused on substantively testing the income tax balances on the financial statements. Tax processes are notoriously manual in nature with numerous adjustments required to manipulate general ledger information into useable tax information. We have compiled a list of the top ten tax controls every company should have in place with the emphasis (as expected) on monitoring controls.

 

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If they were so prescient, how come they did not see that coming?

On May 1st, 2013 the Federal Court of Appeal issued its judgment in the Prescient Foundation. The case itself was notable not simply because of the decisions rendered by the Court on the questions in issue, but also (and perhaps primarily) because of the standard of the review analysis conducted by the Court. Those us who have appeared before the Federal Court of Appeal know that the standard of review can in fact decide the case and so of all the issues decided by the Court this might perhaps have the greatest long term impact on future litigation in the charities area.

 

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Keeping on top of legal requirements: How can I identify legal risks?

There are hundreds of thousands of federal, provincial and municipal statutes and regulations. Laws and regulations exist for virtually every aspect of an organization’s operations—incorporation, employment, safety, environmental, contracts, intellectual property, privacy and so forth. Organizations of all sizes need to be aware of their legal environment and regulations and laws that affect them…

 

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Arrangement did not constitute an employee profit-sharing plan: CPP payments required

The Federal Court of Appeal just decided that an accountant who received payments from a professional corporation he created did not properly create an arrangement that constituted a true employee profit-sharing plan. It was necessary for the professional corporation to make an election that payments would be based on profits; failing that, it was necessary for the professional corporation to have a set formula stating an amount to be computed by reference to profits so the employer was obligated to pay that amount to the trustees under the arrangement.

 

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Succession planning: Apple did it right; why do so many do it wrong?

Lululemon announced Monday that chief executive officer Christine Day will be stepping down after a five-year tenure. Shares plummeted after the statement, down 15 percent by Tuesday morning. During her time as CEO, Day helped grow the high-end yoga brand’s sales to more than $1 billion annually. It’s clear that CEO transitions present a great deal of risk for shareholders, especially as new perceptions are formed. So what’s the best way to deal with risk mitigation during publicized CEO transitions?

 

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Non-profit organizations and the income accumulation minefield

The CRA’s general position is that a non-profit organization (NPO) may earn a limited profit as long as it is incidental to and arising from activities that are directly connected to its not-for-profit purposes. This is essentially a given, as it is not practical to expect an NPO to spend every penny it earns in the same year that it earns it. That being said, there are a few ways for an NPO to run into problems…

 

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