Invictus Accounting Group LLP is extremely proud to announce the addition of three new team members to the leadership team in 2018:
About Invictus Accounting Group LLP
Invictus Accounting Group is a full service Chartered Professional Accounting firm founded in 2012 and based in Vancouver, B.C. Invictus provides advisory, accounting, and tax services to both privately-held and publicly listed companies ranging in size from start-up to large cap. The leadership team are predominantly 'big-4' global firm alumni with real-world industry experience at senior and executive levels. Invictus leverages the varied skill-sets and diverse experience of its team to help our clients across a broad range of finance and accounting needs. We love working with entrepreneurs, rolling up our sleeves, and helping businesses grow rapidly.
We routinely come across a recurring problem where a client’s foreign accounting team is more focused on local tax compliance than on corporate reporting compliance.
The issues we commonly see include the foreign subsidiary (i) not fully closing a period end with accruals as their accounting is often cash-based for tax reporting rather than accrual-based for financial reporting; (ii) not adhering to key internal controls due to time constraints, a feeling of disconnect from the parent as to its importance, and that the hierarchy of command in some foreign jurisdictions enables a boss to easily override a process; and (iii) innocently mis-classifying entries for accounting such as expensing items for tax which the parent capitalizes under their IFRS policies.
Three Solutions We Suggest:
1. Random Control Testing at Site: Always conduct ICFR testing at your foreign location/office, and while there you should select a random sample of documents for testing. This helps mitigate the risk that all the required sign-offs and reconciliations are done after the fact. We commonly find that pre-requested “PBC” documents are ‘cleaned up’ for us.
2. Monthly Close a Must: Ensure you implement a monthly reporting calendar with enough time for the corporate parent to review the foreign subsidiary's work. A regular monthly close process helps train the foreign team, increases collaboration, improves the closing cycle, and identifies problem areas for remediation in advance. This also helps ensure that key controls are in place throughout the year, not just at period end.
3. Regular Visits: Regularly visit your foreign location/office to ensure a high level of collaboration and understanding between the parent and the foreign accounting/finance/operations teams. This helps bring the tone from the top to the field (and foreign office), but most importantly builds trust and fosters a sharing of ideas.
We’d love to hear some of your ideas and feedback on these issues as well. Please feel free to add your comments and thoughts.
Annual reports are a big undertaking for many organizations. They involve a variety of departments and regularly are more than a statement on how the year shaped up financially. They also include information about special projects, staff and other aspects of an organization. While an organization's staff usually takes the lead on preparing the annual report, an accounting firm is often contracted to lend additional credibility to the financial statements within the report and prepare what is known as the "auditor's statement."
Not every business is required to put together an annual report as part of their financial statements, but if your organization is, you'll want a firm on your side experienced with understanding the nuances of this sometimes complex document.
The team at Invictus comes with a diverse background when it comes to preparing annual reports. From client-side to firm-side, we've seen and worked on all kinds of annual reports in industries ranging from public and private sectors, small businesses to large corporations and resource based organizations to real estate and property management firms. Because of that scope of experience, our team knows when to jump in and help put the report together, or when to provide the basic requirements.
Annual reports are generally prepared to coincide with annual general meetings. If you have an AGM and annual report coming up and want advice or want someone who can get involved immediately, let us know; our team would be pleased to lend a hand with one of the most important documents your organization produces.
Commonly, we see organizations turn to mergers as a way to stay stronger, capitalize on knowledge and perhaps weather the storms ahead. Mergers and acquisitions can be excellent strategies, but the winners in the process will be those who pay close attention to people in addition to numbers and data.Business leaders can’t overlook the human element inherent in a merger. Studies have shown that companies who come through a merger “very successfully” are those who have a strategy in place to retain their key talent, take time to marry-up corporate cultures and focus on aligning leadership practices and strategies. This is more than just communication, it’s about planning.
Just as the balance sheets are scrutinized, so too must be departments and people when considering a merger. Get to know the cultures of teams, departments and the overall business. Look for common ground and establish ways to make a big deal out of it. Don’t downplay the differences, but do consider which direction is best for the organization going forward. People are going to play a key role in making these changes happen and in order to have the most successful merger possible, those people need to be “on-board” and aware of the realities ahead.
It may seem like an odd thing for an accounting firm to be centred on people, but if you get to know us at Invictus, you’ll understand that people are the key.
The flexibility of working from home or running a contractor-based business can be a wonderful option for workers, but both employers and the people they hire, need to be conscious of what makes up an employee relationship and what defines a contractor relationship.
A few months ago, we heard from an employer who was confused as to whether their worker was a contractor or an employee. The worker had come to them stating they were a contractor and for the employer, that seemed like a solid answer. After all, the individual had their own business number, company name and billing process. They had an office within their residence and occasionally worked there.
Unfortunately, to the CRA, there is more to the definition of employee or contractor. In Canada there is a Four-Point Test that allows workers and employers to define the nature of their relationship. Flexibility in working arrangements is commonplace and no longer does having a home office define a contractor like it once did, even having a business name and number isn’t enough. Categories like control over the work and how it is done, ownership of tools, chance of profit or risk of loss and integration are all aspects that must be addressed.
When the Four-Point Test was applied to the case of the employer who came to us, we found that for a number of reasons, the worker they had hired was in fact a contractor. The worker made decisions on where and how to perform the work and used their own tools to do so in addition to other aspects.
Before making the decision of who is an employee and who is a contractor, be sure to check the CRA’s guidelines to avoid concerns down the road.