CHAIR'S PROFILE - CGA Online Learning Environment

C E R T I F I E D G E N E R A L A C C O U N T A N T S O F O N T A R I O 

August/September 2011 

Volume 40, Number Four 

BUILDING GREAT TEAMS 

IN THE WORKPLACE 

CHAIR’S 

PROFILE 

BLAKE MERCER, FCGA 

BOARD OF DIRECTORS 

CGA ONTARIO 

+FINANCIAL ANALYSIS: 

EARNINGS GROWTH 

AND RESIDUAL INCOME

VIEW FROM THE CEO ▪ Doug Brooks, FCGA 

Listening To Our Membership 

CGAs and students on the future of the accounting profession 

lake Mercer, FCGA, and I recently completed 

a series of town hall meetings on the future of 

the accounting profession. Blake is the newly 

elected chair of the board of directors of CGA Ontario and 

the subject of the cover story, “Like Father, Like Son,” 

which begins on page eight of this issue. 

Together we hosted six town hall meetings throughout 

late June and early July in locations across Ontario that 

surpassed our most optimistic expectations. They were 

well-attended, the level of engagement was extremely 

high, and our members expressed their appreciation for 

the opportunity to discuss the future of the profession 

in an open, welcoming and transparent environment. 

To me, as a CGA who understands the substantial 

demands upon the personal time of our membership, it 

was gratifying to see how many CGAs and students came 

out to listen, ask questions and express their opinions. 

There appears to be a consensus amongst our membership 

on the future of the accounting profession. 

CGAs recognize that the accounting profession is 

going global. We see the emergence of global account- 

ing designations just as we have seen the globalization 

of accounting standards. 

These developments simply mirror what is happening 

all around us: at the macro level, through free trade 

deals, outsourcing and the global movement of capital, 

and at the micro level, where change is occurring daily 

in our workplaces, regardless of the sector, employer or 

clientele. 

Forces of Unification 

Last March, the American Institute of Certified Public 

Accountants, based in New York, and the Chartered Institute 

of Management Accountants, based in London, 

announced a proposed joint venture that would create 

a new, globally recognized management accounting 

designation, CGMA, which stands for Chartered Global 

Management Accountant. 

Similarly, in Canada, the Canadian Institute of Chart- 

ered Accountants (CICA) and The Society of Management 

Accountants of Canada (CMA Canada) recently announced 

exploratory merger talks that might eventually lead to the 

creation of a new accountancy body and designation. 

Meanwhile, at the time of my writing, all three accountancy 

bodies in Quebec are officially engaged in 

merger talks that may lead to the creation of a new body 

and designation in that province, and would most certainly 

complicate matters of governance and affiliation 

nationally. 

With all the changes occurring in the accounting profession 

at the provincial, national and international levels, 

it’s not surprising that the consensus amongst CGAs and 

students in Ontario is that a nationally unified profession 

might work, but only under the right circumstances. 

CGAs also acknowledge that the accounting profession 

is evolving in conjunction with globalization and that 

we need to participate in the global accounting community. 

Clearly there are many options and many paths to 

consider. We talked about some of those at our town hall 

meetings. 

The Way Forward 

A unified profession that combined the strengths of the 

individual bodies and was fair and equitable to all its 

members would be profoundly different than the status 

quo. At an international level, a unified, national body 

would also have a stronger voice in international discussions 

within the accounting profession. 

But this is not the only path to an international presence. 

The CGA designation is already well respected 

internationally. We have partnerships with some of the 

largest, most highly respected accountancy bodies around 

the world. Our reputation internationally is solid. 

Though every Ontario member and student may 

not be in complete agreement with a way forward, we all 

agree that our Association and designation is strong and 

in a good position to move even further forward. 

We are not a part of official merger talks between 

the national bodies, but we are always talking to our professional 

peers and our colleagues at affiliates across 

Canada, and we will continue to be, as always, guided by 

the interests of our members and students in Ontario. 

One thing was very clear to me as I listened to our 

members and students speak: our passion and commitment 

to the CGA designation has never been stronger. 

We continue to see more than numbers and we will 

continue to keep CGAs at the forefront of the profession 

in Ontario, Canada and around the world. 

DOUG BROOKS, FCGA 

Chief Executive Officer 

CGA Ontario 

2 STATEMENTS AUGUST/SEPTEMBER 2011

STATEMENTS 

The Ledger 

August/September 2011 

4 

5 

6 

7 

Town Halls on the Future of the Accounting Profession 

Harmonized Sales Tax for Ontario Businesses Booklet 

Household Debt Report Released by CGA Canada 

CGA Ontario Endows Schulich School of Business Chair 

Association Board of Directors 2011 Election Results 

Fellowship Designations Bestowed by CGA Canada 

MicroSkills Presents Corporate Spirit Award 

New Professional Development Catalogue Released 

Notes and Letters to the Editor 

16 

17 

21 

Columns 

‘NET ASSETS Paperless Possibilities 

TECH TALK How Safe is Syncing and Sharing 

THE PUBLIC SECTOR Pooled Pension Plans 

8 

8 

12 

18 

20 

22 

23 

Articles 

FEATURE: LIKE FATHER, LIKE SON 

A Profile of Blake Mercer, FCGA 

Chair, Board of Directors, CGA Ontario 

HUMAN RESOURCES 

Building Team Dynamics 

Civility in the Workplace 

FINANCIAL ANALYSIS 

Earnings Growth and Residual Income 

ACCOUNTING STANDARDS 

Public Sector Handbook Update 

NOTES TO STATEMENTS 

Discipline Notices 

COMMUNICATION SKILLS 

A Proper Introduction 

18 

ON THE COVER: Blake Mercer, FCGA, the 

chair of the board of directors of CGA Ontario 

(photograph by Gary Beechey, BDS Studios). 

Published bimonthly by the Certified 

General Accountants of Ontario. 

Contents may not be reprinted 

without permission from the editor. 

The views expressed in articles and 

columns are not necessarily those 

of Statements or CGA Ontario. 

Letters to the Editor should be 

addressed to Statements, in care 

of CGA Ontario, by email to 

editor@cga-ontario.org, by fax 

to 416-322-5594, or by 

mail to CGA Ontario. 

Statements is printed on 10 

per cent recycled paper. 

Publications Mail Agreement 

No. 40006733. 

Return undeliverable 

Canadian addresses to: 

Circulation Dept., 

330-123 Main Street, 

Toronto ON M5W 1A1. 

Editor 

Colin Ellis 

cellis@cga-ontario.org 

Associate Editor 

Christopher Stephenson 

cstephenson@cga-ontario.org 

Graphic Designer 

Tim Chau 

tchau@cga-ontario.org 


240 Eglinton Avenue East 

Toronto ON M4P 1K8 

Telephone: 416-322-6520 

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Website: cga-ontario.org 

LAST ISSUE 

Read “Developing 

Opportunities” in the 

June/July 2011 issue of 

Statements, online in 

the publications section 

at cga-ontario.org. 

AUGUST/SEPTEMBER 2011 STATEMENTS 3

The Ledger 

N E W S & N O T E S F R O M C G A O N T A R I O 

CGA ONTARIO HOLDS 

TOWN HALL MEETINGS 

CGAs Voice Their Opinions 

on the Future of the 

Accounting Profession 

CGAs heard from the Association’s 

chair of the board of directors 

and its chief executive officer in 

meetings like this across Ontario. 

CGAs across Ontario gathered 

for a series of town 

hall meetings throughout 

June and July to voice their 

opinions on the changing 

landscape of the accounting 

profession. 

In response to the recent 

announcement of exploratory 

merger talks between the 

Canadian Institute of Chartered 

Accountants (CICA) and 

The Society of Management 

Accountants of Canada (CMA 

Canada), CGA Ontario scheduled 

six town halls across the 

province, plus a virtual town 

hall meeting via webcast, to 

provide a forum for CGAs and 

students to ask questions 

and share their opinions on 

the future of the accounting 

profession. 

More than a hundred CGAs 

attended a two-hour town 

hall meeting in the Greater 

Toronto Area in July. 

Town Hall Meeting, 

Golden Horseshoe Region 

An Open Environment 

Many members expressed 

their appreciation for the 

opportunity to express their 

opinion and discuss the future 

of the profession in an 

open environment with their 

colleagues and the leadership 

of the Association. 

Led by Blake Mercer, 

FCGA, chair of CGA Ontario’s 

board of directors, and 

chief executive officer Doug 

Brooks, FCGA, the meetings 

drew more than 600 CGAs, 

reaching capacity in several 

locations, while many more 

CGAs participated in the 

virtual town hall, which has 

been archived for viewing by 

all CGAs and students (log in 

to cga-ontario.org and click 

on “News and Updates”). 

Opinion, Consensus 

Not surprisingly, there was 

a variety of opinions expressed 

on the future of the 

accounting profession. Members 

are confident about the 

strength of their designation 

and their prospects for the 

future. They also see the potential 

emergence of global 

accounting designations, 

given the globalization of 

business and the increasing 

standardization of accounting 

practices around the 

world. Discussion will undoubtedly 

continue as new 

developments emerge in 

the accounting profession 

and talks continue between 

professional accounting 

organizations. 


CGA ONTARIO 

RELEASES HST GUIDE 

Supporting Best Practices 

for Ontario Businesses 


is pleased to 

announce the 

publication of 

Harmonized 

Sales Tax for 

Ontario Business, 

an update to our highly 

popular HST booklet, Harmonized 

Sales Tax in Canada, 

which was published in 2009. 

This valuable and 

user-friendly HST booklet, 

authored by HST subject 

matter expert Diane Gaudon, 

FCGA, offers businesses 

useful tips on how to comply 

with HST, highlighting important 

changes that have 

occurred since the 2009 

implementation. 

“It was important for 

the Association to publish 

a second HST booklet that 

could take Ontario businesses 

from a place of transition 

to best practices,” said 

Ted Wigdor, CGA Ontario’s 

vice-president of government, 

regulatory and corporate 

affairs, upon the release 

of the booklet in June. The 

Honourable Sophia Aggelonitis, 

Minister of Revenue, 

echoed his thoughts. “CGA 

Ontario plays an important 

role in helping business understand 

the most significant 

tax change in a generation,” 

said the Minister. “I look 

forward to working with CGA 

Ontario as we move forward 

with implementation for Ontario’s 

Tax Plan for Jobs and 

Growth.” 

Harmonized Sales Tax 

for Ontario Business can be 

read online in the publications 

section of CGA Ontario’s 

website (cga-ontario.org) 

under Information Booklets 

and Brochures. 

CGA CANADA HOUSE- 

HOLD DEBT REPORT 

Fourth Report Reveals 

Alarming Consumer Trends 

On June 14th, 

CGA Canada 

released its 

fourth comprehensive 

research 

report 

on household debt and consumption, 

entitled “A Driving 

Force No More: Have Canadian 

Consumers Reached 

Their Limits” 

The report details in 

depth how Canadian families 

face an ongoing battle 

against the balance sheet as 

household debt reaches an 

historic high. “The debt of a 

typical household is rising,” 

says Rock Lefebvre, CGA 

Canada’s vice-president of 

research and standards and 

the co-author of the report. 

“The financial situation of 

certain groups of households 

is much worse than 

average and continues to 

deteriorate.” 

The survey-based report 

reveals several alarming 

trends, as single-parent families, 

retired Canadians, and 

those with annual household 

income of less than 

$50,000, face a bleak financial 

situation. The full report 

is available at cga-canada.org. 

CGA ONTARIO ANNUAL 

GENERAL MEETING 

CGA Ontario’s annual general 

meeting will be held on 

Friday, September 16, 2011, 

at the Hilton Toronto on Richmond 

Street West. The AGM 

will begin at 6 p.m. and will 

be followed by the Member 

Recognition and Awards 

Dinner at 7p.m. If you plan to 

attend, please register online 

at cga-ontario.org. 

Leaders from CGA Ontario and the 

Schulich School of Business convened for 

the signing ceremony on June 22, 2011. 

CGA ONTARIO PARTNERS WITH SCHULICH 

SCHOOL OF BUSINESS 

New Chair in Global Competitiveness for Smalland 

Medium-Sized Enterprises 

CGA Ontario is pleased to announce a $2 million gift to the 

Schulich School of Business at York University to support the 

creation of a new, endowed academic chair focusing on global 

competitiveness for small- and medium-sized enterprises 

(SMEs). 

The CGA Ontario Chair in Global Competitiveness for 

SMEs will carry out intensive research into the success factors 

— as well as the challenges — currently affecting the internationalization 

of SMEs. 

This research can then be used to enhance export knowhow 

and foreign investment competence of businesses; to 

identify and leverage extensive international networks; and 

to develop public policies specifically designed to create the 

conditions necessary for Canadian SMEs to become more 

broadly engaged in the global marketplace. 

“We’re very excited to be working with Schulich in this 

joint project, as the SME business community is the backbone 

of today’s economy,” said CGA Ontario’s chief executive officer, 

Doug Brooks, FCGA, at the signing ceremony held at the 

Schulich Scool of Business on June 22, 2011. 

“A significant percentage of CGAs in Ontario serve SMEs. 

Research by the CGA Ontario Chair in Global Competitiveness 

for SMEs will play an important role in assisting SMEs to 

become more competitive outside their domestic markets.” 

Dezsö J. Horváth, dean of the Schulich School of Business, 

thanked CGA Ontario and its members for making this vital 

new chair possible. 

“Canada needs to do more to turn our small- and medium-sized 

enterprises into global competitors,” said Horváth. 

“What we lack is detailed knowledge about the success factors 

and challenges affecting the internationalization of smallto 

medium-sized enterprises. 

“The CGA Ontario Chair in Global Competitiveness for 

Small- and Medium-sized Enterprises will help us build that 

knowledge.” 

From left to right: Mamdouh Shoukri, president & 

vice-chancellor, York University; Doug Brooks, FCGA, 

chief executive officer, CGA Ontario; and Dezsö J. 

Horváth, dean, Schulich School of Business. 


2011-12 CGA ONTARIO 

BOARD ELECTION 

RESULTS 

Blake Mercer, FCGA, 

Elected Chair of the Board 

The board of directors of the 

Certified General Accountants 

of Ontario is pleased 

to announce the following 

officers of the Association 

for the 2011-12 fiscal 

year. Blake Mercer, FCGA, is 

elected chair of the board. 

Janice Charko, FCGA, is 

elected vice-chair and Anthony 

Stilo, FCGA, is elected 

secretary-treasurer. Frank 

Mensink, FCGA, is immediate 

past chair. 

Newly elected to the 

board are Restituto Del 

Rosario, CGA; John Hunter, 

FCGA; and Sandra Whyte, 

FCGA. Retiring from the 

board are Peter Cardinal, 

FCGA; Liang Chen, FCGA and 

Everett Colby, FCGA. 

Election results 

Under Article 2, section 13 

of the Association Bylaws, 

the CEO shall report to each 

member which candidates 

were elected as directors 

and list: 

1. The names of the 

candidates. 

2. Their ranking in order of 

votes received. 

3. The vote count received 

by each candidate. 

4. The number of spoiled 

ballots. 

5. The total count of votes 

received and percentage 

of membership voting. 

The final election results 

were as follows: 

Edward Carter 1008 

Debra Taylor 906 

Roseline Brennan 784 

Sandy Whyte 741 

John Hunter 722 

Restituto del Rosario 659 

Alan Robert Bickerton 510 

Annette Sullivan 494 

Diana Wielgus 485 

John Charles Harris 474 

Ram Venkat 444 

Ramona Rudeanu 348 

Amalia Trusca 219 

In total, 1727 ballots were 

cast with zero spoiled ballots. 

Based on membership 

of 20,680 (as of April 2011), 

8.35 per cent of members 

voted in the board election. 

FELLOWSHIP HONOURS 

FCGAs Bestowed on 10 

Members of CGA Ontario 

CGA Canada’s fellowship 

designation recognizes CGAs 

who have provided exceptional 

servce to the Association, 

the profession or the 

public, or who have achieved 

prominence through a variety 

of means. The designation 

was recently bestowed upon 

the following 10 members of 

CGA Ontario: 

Diane Gaudon, FCGA, is a 

sales tax specialist who has 

presented numerous professional 

development seminars 

for CGA Ontario and 

other professional associations 

and business groups. 

Most recently, Diane provided 

exemplary service and 

demonstrated leadership 

by acting as an HST ambassador 

to CGAs and the business 

community at large. 

Bruce Huggett, FCGA, is a 

dedicated and noteworthy 

volunteer in the Peel Region, 

on behalf of his community 

and Association. A CGA 

since 1972 and a professional 

practitioner since 

1993, Bruce has served 

Peel Chapter in numerous 

capacities, including chair, 

for more than 20 years, and 

served for three years on the 

discipline committee of CGA 

Ontario. He has also been a 

prominent volunteer in Peel 

Region sports, where he has 

applied his skills as a CGA, 

for more than 30 years. 

Blake Mercer, FCGA, is a 

partner at Mercer & Mercer, 

Certified General Accountants 

Professional Corporation, 

in Milton, Ontario. 

The chair of CGA Ontario’s 

board of directors, Blake has 

served the Association for 

many years at the provincial 

and community levels. He is 

a past treasurer of the Milton 

Chamber of Commerce. 

Sergio Marchionne, FCGA, 

is the chief executive officer 

of Fiat S.p.A. and the 

Chrysler Group LLC. The 

recipient of many business 

and industry awards, Marchionne 

is also the chairman 

of the European Automobile 

Manufacturers Association, a 

non-executive vice-chairman 

of UBS AG, and chairman of 

SGS S.A. 

Lance Rieger, FCGA, is a 

licensed public accountant 

(LPA) and partner in the 

firm EPR Rieger Bray Hohl 

Licensed Public Accountants, 

serving the business 

community of Chatham-Kent 

and acting as an authorized 

training office for CGAs 

pursuing public accounting 

licences. An LPA since 2004, 

Lance has served CGA Ontario 

in numerous capacities 

since becoming a CGA 

in 1982. 

Rafiq Rokerya, FCGA, is an 

audit team leader with the 

Canada Revenue Agency 

(CRA) who has provided exemplary 

volunteer service to 

the City of Mississauga and 

acted as an ambassador 

of the CGA designation in 

the South Asian community. 

A founding member of 

the Memon Association of 

Canada, he has served on 

the Mississauga Appeal Tribunal, 

the election finance 

committee of the City of Mississauaga, 

and as treasurer 

of the IPC Charitable Organization 

and the Community 

Volunteer Income Tax Program 

of the CRA. 

Debra Taylor, FCGA, is a 

professional practitioner, 

member of CGA Ontario’s 

board of directors and former 

professor at Lambton College. 

Twice a winner of the 

Sarnia Lambton Outstanding 

Business Achievement 

Award, she is the current 

chair of the Sarnia Lambton 

Chamber of Commerce, 

and has served her community 

through a number 

of charitable and volunteer 

endeavours. 

Shirley Tom-Grigg, FCGA, 

is a professional practitioner 

and member of CGA 

Ontario’s board of directors 

who has served her chapter 

and Association in numerous 

capacities, including chapter 

chair and chair of the discipline 

and public accounting 

licensing review committee. 

A noteworthy volunteer in 

Peel Region, she is a current 

member of the Oakville 

Chamber of Commerce and 

the Estates Planning Council 

of Halton. 

Ray Patrick, FCGA, is the 

president of Mary Kay Cosmetics 

Ltd. in Canada. A recognized 

leader in the direct 

selling market, Ray is a board 

member of the Direct Sellers 

Association, a board member 

and past chair of the Canadian 

Cosmetic, Toiletry and 

Fragrance Association, and 

a board member of the Look 

Good Feel Better program, a 

national program designed 

to assist women living with 


cancer manage the appearance-related 

side effects of 

cancer treatment. 

Sandra (Sandy) Whyte, 

FCGA, is a dedicated volunteer 

in the Sarnia-Lambton 

community, contributing to 

the success of a number 

of charitable events. Sandy 

served on the board of 

Sarnia Chapter for nine 

years, including two years 

as chair, and is currently 

a marker for CGA Ontario. 

A staunch advocate of the 

CGA program, she is a continuing 

education professor 

at Lambton College and has 

been teaching in the business 

program since 1996. 

CGA ONTARIO SHOWS 

CORPORATE SPIRIT 

Microskills Gala Sponsored 

by CGA Ontario 

CGA Ontario was the “hospitality 

sponsor” and recipient 

of the Corporate Spirit Award 

at the 2011 MicroSkills Gala 

Celebration and Awards Banquet, 

held at the Pearson 

Convention Centre in Brampton 

on May 26, 2011. 

Community MicroSkills 

Development Centre is a 

multicultural, non-profit 

organization committed to 

assisting the unemployed, 

with priority to women, racial 

minorities, youth and 

immigrants. The Corporate 

Spirit Award is presented to 

an organization that demonstrates 

a strong commitment 

to MicroSkills and the community 

while having a strong 

social and economic impact. 

Special guests at this 

year’s awards included Jean 

Augustine, commissioner, Office 

of the Fairness Commissioner 

and the Honourable 

Eric Hoskins, Ontario Minister 

of Citizenship and Immigration. 

Both praised CGA 

Ontario’s efforts supporting 

new Canadian immigrants, 

driving career opportunities 

and advancement. 

PD CATALOGUE 2011/ 

2012 NOW ONLINE 

PD Year Promises More 

Quality Programming 

The 2011-12 Professional 

Development Catalogue is 

now online in the professional 

development section 

at cga-ontario.org. The 

entire year’s professional 

development programming is 

presented in one handy catalogue 

presented online in 

a digital format that can be 

downloaded to your desktop 

in PDF. 

With more than 100 

seminars, 50 speakers and 

10 seminar locations across 

Ontario, this year’s quality 

programming will refine your 

core competencies, sharpen 

your professional expertise 

and help you leverage your 

management and leadership 

skills. 

This year, we are proud 

to present live broadcasting 

of several seminars relating 

to taxation, accounting standards 

and professional practice. 

Further details will be 

announced in upcoming issues 

of Statements and ’Net 

Value. 

And we’re proud to 

partner with such leading 

institutions and associations 

as the Richard Ivey School 

of Business, the DeGroote 

School of Business, the 

Human Resources Professionals 

Association, and the 

Canadian Payroll Association 

to offer you more in crossplatform 

learning and networking 

opportunities. 

Visit cga-ontario.org and 

book your 2011-12 professional 

development opportunities 

today! 

Notes 

STATEMENTS TAKES 

GOLD AT KRW AWARDS 

CGA Ontario’s Statements Magazine 

took home the gold at the 57th 

annual Kenneth R. Wilson (KRW) 

Awards for business press journalism on June 7, 2011. 

“Driving Success” [Statements, February/March 2010], our 

feature profile of certified general accountant Sergio Marchionne, 

the head of Fiat and Chrysler, won a Gold Award for Best Profile 

of a Person. 

“Critical Incident Management: A Sure-Fire Recipe to Avoid 

Disaster” [August/September 2010], which was written by Craig 

Hannaford, CGA, received honourable mention in the category 

Best How-to Article or Series of How-to Articles. 

The KRW Awards (krwawards.ca) celebrate the best in business 

press journalism and are co-produced by the Canadian Business 

Press and Magazines Canada. 

BACK ISSUES AVAILABLE 

We remind readers that copies of many of our back issues are 

available and can be mailed, free of charge, to CGAs and students 

in the CGA program of professional studies. If you enjoyed 

a particular article or were included in News & Newsmakers, 

perhaps you’d like an extra copy to keep or pass on to friends, 

family or acquaintances. Please contact editor@cga-ontario.org 

with your request. 

WE REGRET 

In the June/July 2011 issue of Statements, Ray Walter was reported, 

on page five, as having passed away on May 17, 2011. 

Walter passed away on March 17, 2011, as correctly reported on 

page 27. We regret the error. 

Letters 

DEAFENED VERSUS DISABLED 

[As] a CGA with severe hearing loss, I am not familiar with the 

term “deafened.” 

The Canadian Hearing Society and similar organizations that 

serve Deaf and hard of hearing people are right in not using the 

term “hearing-impaired.” Someone might get the wrong idea as 

[to] just how “impaired’ I might be, especially behind the wheel. 

I remind friends and colleagues of my hearing disability, 

whether on the phone or in a noisy room, because that is precisely 

what I have, a disability. 

But thanks to modern technology and social and business 

awareness it does not mean I cannot function as anyone who 

does not have this disability. 

Robert (Alan) Pellettier, CGA 

Toronto, Ontario 


BILL MERCER, FCGA 

BLAKE MERCER, FCGA 

Like Father, Like Son 

A Profile of Blake Mercer, FCGA 

CHAIR, BOARD OF DIRECTORS, CGA ONTARIO 

Let’s get something out of the way, right from the start: 

Blake Mercer, FCGA, is the son of Bill Mercer, FCGA. Bill is 

a past president of CGA Ontario. Blake is the newly elected 

chair of the board of directors. 

Together they are partners in Mercer & Mercer, Certified 

General Accountants, in Milton, Ontario. 

One could argue that this is not particularly relevant to 

a profile of the incoming chair of the Association. But, on 

the other hand, the Mercers are the first father and son in 

the history of the Association to lead CGA Ontario in their 

respective years. So it’s tempting to draw parallels. 

Both are friendly, somewhat reserved men who exude 

professional competence. Each tends to speak in simple, 

direct sentences that rarely ramble on into paragraphs. Both 

love their sports; Bill plays golf, Blake plays baseball. 

In the 1980s, when the accounting profession was facing 

the challenges of computerization, Bill Mercer was asked to 

lead the 1980s task force that resulted in CGA Canada’s Program 

90, a fully revised CGA program of professional studies 

that included the integration of computer technology. 

Today, with the accounting profession facing an altogether 

new challenge — the challenge of globalization — Blake 

Mercer is leading the Association during a time of profound 

international convergence in accounting standards and accountancy 

bodies. 

As the old proverb says: Like father, like son. 


TOWN HALL MEETINGS 

Blake Mercer is sitting in the boardroom of Mercer & Mercer in 

Milton. It’s mid-July and he has just completed the last of CGA 

Ontario’s town hall meetings on the future of the accounting 

profession. 

Over the course of the past few weeks he has led — together 

with CGA Ontario’s chief executive officer, Doug Brooks — six town 

halls, in Burlington, London, Ottawa, Sudbury, Mississauga and 

downtown Toronto. 

“I think the meetings spoke volumes about 

the Association” says Blake with measured enthusiasm. 

“We had a great turnout. The level 

of engagement was high. It was important as 

an Association that we sought the opinion of 

our membership. And it was important for me 

personally, as chair of the board, to listen and 

observe, to really hear what members had to 

say.” 

Mercer, who has a degree in political science 

from the University of Toronto, is known 

within the Association for his commitment to 

good governance. “The town hall meetings 

were an affirmation of the good governance 

of the board. Where we are as a board mirrors 

where the members are on this issue.” 

Adjusting his glasses, Mercer connects 

the dots between the Association and the accounting 

profession as a whole, which appears 

to be unifying across borders. As examples he 

cites IFRS and the globalization of accounting 

standards, the growing number of transborder 

partnerships between accountancy bodies, 

and the ever-increasing synergies between 

markets and capital around the world. 

“Look at the international financial events 

of the past few years,” says Mercer, leaning 

forward, “beginning with the market meltdown 

of 2008. The world of accounting and finance 

is converging. Whether you want to accept it 

or not, you ignore it at your own peril.” 

MILTON, ONTARIO 

The town of Milton, Ontario, is one of the fastest growing communities 

in Canada. Ever since the “Big Pipe” project was completed, 

in 2001, bringing water straight to the town from Lake 

Ontario, Milton’s population has risen annually, yet the town still 

boasts one of the highest average household income levels in 

the Greater Toronto Area. 

Perhaps because its big box stores have been relegated to 

Steeles Avenue and the James Snow Parkway, Milton’s Main Street 

retains its small town charm. Drive past the mom-and-pop shops, 

the restaurants, the post office and its tall clock tower, turn down 

Commercial Street, and soon you’ve entered a pretty little enclave 

of tree-lined streets and ranch-style homes. 

That white building on your left, the one that vaguely resembles 

a church, is where you’ll find Mercer & Mercer, Certified General 

Accountants. 

The firm traces its roots back to 1975, when Bill Mercer 

purchased a small practice and began his career as a professional 

practitioner. “I wanted to strike out on my own,” he says, 

mentioning that he spent a few years with the Canada Revenue 

Agency. “I’ve never regretted it. I wouldn’t have it any other way.” 

In the terminology of the times, Bill was president of CGA Ontario’s 

board of governors in 1984-85 (the equivalent of “chair of 

The meetings spoke volumes about 

the Association. Where we are as a 

board mirrors where the members are 

on this issue. 

the board of directors” today). He is also a past president of CGA 

Canada. 

Dressed in a snappy suit and tie, he still manages to retain 

the air of a kindly country doctor who mixes practical advice with 

a friendly bedside manner. Though his focus is on the growing 

field of estate planning, typically assisting clients who have been 

with the firm for decades, he explains that “Blake runs no less 

than 75 per cent of the business now. We’re partners but Blake 

is the president.” 

MERCER & MERCER, CGAS 

“Mercer & Mercer is a typical small- to medium-sized practice,” 

explains Blake. “We have a mix of personal tax clients and corporate 

clients. We do about a thousand personal tax returns a year 

and have several hundred corporate clients, ranging from notice 

to readers, review engagements — which we do with a licensed 


public accountant who is a CGA — and financial services such as 

estate planning.” 

Blake, who has been with the firm since 1996, says “95 per 

cent of our business is within a 10-minute drive of Milton, which 

is a fantastic place to do business. The population has doubled 

within the last 10 years and our practice has grown as Milton has 

grown.” 

Blake praises Halton Region, which includes Burlington, Milton 

and Oakville, as “a great place to raise a family.” Married to Jill, 

an elementary school teacher, the couple have a son, Robert, 

who is five. The Mercers’ first date together was game six of the 

1993 World Series at the SkyDome, where the Blue Jays won the 

game and the World Series on a three-run shot in the bottom of 

the ninth by Joe Carter. 

“Our whole family plays baseball,” says 

Blake proudly. “I play, my wife plays, and I 

coach my son’s team.” Mercer even served 

as the treasurer and director of the Burlington 

Women’s Fastball League for three years. 

More importantly to the practice, Blake 

served for several years as treasurer (and 

chair of the scholarship committee) of the 

Milton Chamber of Commerce, but left the 

Chamber board when he was elected to the 

board of CGA Ontario. 

He’s quick to mention that his father 

served two terms as president of the 

Chamber and was recognized as Milton’s business person of the 

year. 

Of the Mercer & Mercer partnership, Blake says, “Because 

my father has been in business for more than 35 years, we have 

two and sometimes three generations of clients from within the 

same family. Within the broader business community, we’re known 

for high quality service that we try to tailor to the needs of our 

clients.” 

Bill Mercer adds, “Blake and I complement one other. He’s 

more knowledgeable about current happenings within the profession. 

I’m in awe of his computer and writing skills and his ability 

to hammer out a top-notch letter or report to a client.” 

Bill tips his hat to Blake’s mother, Leslie — who has worked 

at Mercer & Mercer throughout its entire 35-year history — for 

contributing to Blake’s writing skills. “She was an English major 

at university and she really pushed both Blake and his sister Mary 

when it came to grammar and writing.” 

On the boardroom wall is a framed photograph of the Burlington 

Teen Tour Band. It was taken in 1987, at the Tournament of 

Roses in Pasadena, California. If you look closely enough, among 

the hundreds of musicians, is a teenaged Blake Mercer, playing 

the trombone. 

It’s one of a number of family mementoes in the office. It’s 

also an indication that by no means did Blake Mercer always intend 

to follow in his father’s footsteps. 

GROWING UP CGA 

“I grew up around accounting,” says Blake Mercer candidly, “and 

I grew up around CGAs. Several of our family friends were CGAs 

and some of them served on the board of CGA Ontario. There was 

a whole group of kids who were the sons and daughters of CGAs. 

We’re not competing for 

donors or funds. We’re 

competing for students 

and we’re competing for 

jobs for our members. 

And the competition is 

cutthroat. 

We all grew up together.” 

As a teenager, Blake did some bit work around the office and, 

when the firm first started processing computerized tax returns in 

the 1980s, Blake and his sister, Mary, would help assemble them 

on the dining room table of the Mercer home. But these family 

tales are no different than they would be for children whose parents 

ran a restaurant or a hardware store. 

“Honestly,” Blake says, holding up his hands, “I was never 

pushed into the profession. It was something I eventually decided 

to pursue on my own.” 

Bill Mercer concurs. When asked if his son was influenced to 

pursue the profession, the elder Mercer is adamant: “Absolutely 

not. We didn’t even push him to come into the practice. He approached 

us.” 

Blake took accounting courses 

during high school and university (he 

began in the commerce program) and 

worked in the corporate accounting department 

of a large insurance company 

as a co-op student. 

“When I came out of university in the 

mid-90s, I wanted a career and the family 

business was there,” he says. “I grew up 

with a daily demonstration of the difference 

the CGA designation can make in a 

person’s life, and I wanted some of that 

success for myself.” 

Upon joining the practice in 1996, Blake immediately transitioned 

the office to a fully computerized, networked workplace, 

resulting in more streamlined work processes and efficiencies. 

Bill Mercer, who led the Program 90 computer integration of the 

CGA program, nonetheless admits that “We wouldn’t be where 

we are today in terms of computer technology without Blake. He’s 

our go-to guy whenever we have a problem.” 

Blake became a CGA in 2002 and immediately volunteered 

with CGA Ontario’s Hamilton Chapter. He began by invigilating 

exams, was elected to the chapter board in 2003, chaired the 

chapter’s public practice committee and was elected chapter 

chair in 2005-06. 

“When I get involved in something I really like to get involved,” 

he admits. One year later, in 2006, he was elected to the board 

of directors of CGA Ontario. 

GOVERNANCE & THE BOARD 

“Our board operates in a very interesting dynamic,” asserts Blake 

Mercer, warming to the topic of governance. “We are a memberbased, 

not-for-profit association with a general election process, 

yet we operate in an ultra-competitive marketplace. So how do 

you balance the needs and desires of a member-based, not-forprofit 

association that must, by necessity, compete 

“We’re not competing for donors or funds,” he explains. 

“We’re competing for students and we’re competing for jobs for 

our members. And the competition is cutthroat. 

“It’s a very challenging dynamic. Some members may feel that 

we should be a more folksy, grassroots board. In my opinion, we 

should be strategic and forward-thinking, more ‘corporate’ than 

your local charity board. But if you go too far in one direction you 

run the risk of alienating members and potential directors. If you 


Photography by GARY BEECHEY, BDS Studios 

Blake Mercer, FCGA, Chair, Board 

of Directors, Certified General 

Accountants of Ontario 

go too far in the other you may suffer strategically.” 

Mercer has chaired a standing committee devoted entirely to 

issues of governance for the past two years. “I didn’t realize I was 

as much of a policy wonk as I am,” he says, laughing, “but I love 

it. It inspired me to enrol in the directors’ college at the DeGroote 

School of Business. This fall I write the exam for the chartered 

director designation.” 

Under the committee’s direction, the board has brought in 

consultants to review the board’s practices, and some of the senior 

officers have undertaken formal governance training. 

“I think we’re doing a good job of maintaining a proper balance,” 

says Mercer, “but there is always room for improvement. 

That said, one of the great strengths of our Association is that by 

and large our board truly represents our membership, and that 

commitment to our membership was fully demonstrated at the 

town hall meetings.” 

LIKE FATHER, LIKE SON 

“The board is in full support of the strategic framework and direction 

of the Association,” says Blake, “and we have a lot to build 

on in the coming year. As an Association we’re committed to 

recruiting high quality students to the CGA program, to creating 

opportunities for CGAs no matter where their careers may take 

them, and to continuing to raise our profile with employers, government 

and academia. 

“We also want to encourage CGAs in professional practice to 

consider forming larger practices, and perhaps authorized training 

offices, that would not only benefit them but benefit CGAs and 

students who wish to pursue careers in public accounting.” 

Bill Mercer says he warned his son that his time will be taken 

Bill and Blake Mercer outside 

Mercer & Mercer, Certified General 

Accountants, in Milton, Ontario. 

up by the Association to a degree that he cannot imagine now, 

but the Mercer family will be there to support him. One doubts 

he’ll have much time to play baseball, though he still hopes to 

coach his son’s little league games, “because I would like nothing 

more as a baseball parent than to see my son pitch in the major 

leagues.” 

OK. But failing that, is there the possibility for another generation 

of Mercer & Mercer, Certified General Accountants 

“I wouldn’t discourage it,” says Blake wryly, “but I’ll let my son 

choose his own path. If it leads to another Mercer & Mercer, I’m 

always looking for a succession planning opportunity.” 

“Like Father, Like Son,” by Colin Ellis, editor of Statements. 


FEATURE ▪ Human Resources 

Building 

Team 

Dynamics 

BY FLANNERY DEAN 

Not so long ago when employers wanted to boost 

morale, a box of doughnuts or a round of drinks 

after work used to do the trick. Organizations don’t 

get off so cheaply anymore. 

Now employers are realizing that 

adrenaline is the high that binds, 

as some organizations let their hair 

down and pursue extreme or unusual activities 

in the name of teambuilding. Team 

drumming, skydiving and rock climbing — 

even creating a haunted house — were a 

few unique team-building activities mentioned 

in a recent teambuilding survey by 

The Creative Group in Toronto. 

TEAM-BUILDING TITANS 

The companies that are taking teambuilding 

to new heights are those with 

money to spend, according to Anne 

Thornley-Brown, president of The Training 

Oasis, a Toronto company that creates 

adventure-based team-building events 

for organizations such as IBM, Manulife 

Financial and Telus. 

Joanne Doust, director of human resources 

at Bell Canada in Calgary, says 

it’s not just the events that have evolved 

during her 20-year tenure — interest in 

team-building activities has also undergone 

significant growth. 

While some emerge from an annual 

HR plan, many managers and executives 

are now organizing excursions for their 

departments. “They’re more savvy about 

making sure that teams and work projects 

come together,” says Doust. 

Bell’s Calgary contingent isn’t bungee 

jumping off any tall buildings, but taking 

a group culinary class is one way Bell encourages 

employee contact. And like many 

companies, Bell also yokes community 

involvement with teambuilding events — 

like sending groups out to volunteer in the 

community. Collin Ezzell, division director 

of The Creative Group, says most teambuilding 

still consists mainly of feel good 

classics like taking the group out to see a 

baseball game. 

WORTHY INVESTMENTS 

“It’s not so much skills [that companies 

are emphasizing] because the training 


Team-Building ▪ FEATURE 

From HR 

Magazine, two 

articles on the 

components of 

building great 

teams in the 

workplace 

and development market has definitely 

declined. What [organizations] are looking 

for is to get people to work more effectively 

together,” says Doust. 

Businesses want to see a return on 

investment in the form of increased productivity, 

she says, and a splashy event 

may act as an endorphin-rushing jumpstart 

before the real work begins. 

“We’ve reorganized some of our teams 

recently, and people are now working with 

different groups,” says Doust. Timing is really 

important so they feel connected with 

their new team. To get the most benefit, 

the exercise has to be relevant to what’s 

going on at work.” 

CIVILITY IN THE WORKPLACE 

By Melissa Campeau 

A 

nyone who has spent time 

in an office environment 

has likely endured a little 

incivility: The coworker with the 

very loud phone voice, the perpetually 

grumpy cubicle mate or 

the staffer who eats fragrant 

meals at her desk every day. More 

than just irritating, these seemingly 

minor acts of incivility can 

add up to something much more 

serious if they’re not addressed. 

According to Lewena Bayer, 

president of Civility Experts, and 

a cultural competence assessor 

and Canadian culture and communications 

facilitator, if these 

small but troublesome behaviours 

are left to fester, more positive 

team-oriented behaviours will suffer, 

leading to negative effects on 

productivity and profit. 

Linda Allan, a business behaviourist 

and a certified management 

consultant with 30 years 

experience in corporate roles, describes 

civility in the workplace as, 

“conducting yourself in a way that 

respects the space and ideals of 

your coworkers.” 

Signs of trouble 

Bayer suggests this simple assessment 

to determine the degree of 

mutual respect in a workplace: 

“When you ask employees how 

they are, listen to the responses. 

In more civil workplaces, employees 

understand that part of their 

job is to be positive, so by answering, 

‘I’m having a terrible day’ zaps 

a bit of positivity from someone 

else. Imagine the impact on morale 

when the majority of employees 

express negativity in the first 

10 minutes of workplace interaction.” 

Sometimes the signs are 

even more obvious. When instances 

of incivility are left unaddressed, 

says Allan, employees 

can become territorial, hoard information 

and adopt a meagainst-you 

attitude. Bayer says 

these will almost inevitably lead to 

an increase in staff turnover, customer 

complaints, and, ultimately, 

a depleted bottom line. 

Why does this happen 

According to Allan, incivility in the 

workplace has been on the rise for 

the past few years. “In the economic 

downturn, workloads went 

up and everyone has been under 

more pressure,” she says. “Now 

there is less attention paid to how 

people behave and cubicle conduct 

has really slipped.” 

She suggests that too-casual 

work attire can lead to trouble, 

too. “If people are dressed in suits 

in the office, there’s a certain decorum 

that’s observed and it 

tends to permeate the whole organization,” 

says Allan. 

Continued on page 15 


FEATURE ▪ Human Resources 

Team drumming, 

skydiving and rock 

climbing are just a few 

of the unique teambuilding 

activities taking 

employees to new 

heights 

Attracting and keeping top employees 

is often the rationale behind team-building 

events. Doust says there’s more to teambuilding 

than simple retention issues but 

does acknowledge that there is pressure 

to keep ahead of the curve. 

Hot air ballooning, taking a comedy 

improv class, fire walking — just another 

day at work, right 

Not at all — and that’s the point. By 

taking employees out of their comfort zone, 

physically and emotionally, companies are 

counting on unfamiliarity to create deeper 

working relationships, particularly during 

reshuffling or periods of change. 

What companies hope to gain from 

team-building and what employees actually 

get from the experience may be very different. 

Professor Gerard Seijts, associate 

professor of organizational behaviour at 

the Ivey School of Business at the University 

of Western Ontario, suggests coherence is 

a key factor in an event’s effectiveness. 

Businesses need to make sure 

employees are briefed on the true significance 

of the action to insure the benefit. 

They need to answer an employee’s unspoken 

question: “Why the heck am I here 

instead of doing my job” 

Here, Seijts says, a good facilitator is 

essential. 

”The facilitator needs to clearly explain 

how [the employees] are going to take 

these lessons to the boardroom or onto 

the factory floor. If they don’t do that or if 

they’re not interested then it’s a waste of 

money.” 

NOT A PANACEA 

A trust fall — when you fall back into the 

arms of a colleague — may act as a dramatic 

metaphor for building team confidence, 

but the reality is that genuine trust 

and respect between coworkers doesn’t 

spontaneously develop. Professor Lynne 

Purvis, a psychologist who specializes 

in workplace issues at the University of 

Surrey in the U.K., points out good working 

relationships develop in the daily encounters 

and experiences of the workplace. 

“Team-building exercises may at the 

very least furnish opportunities to get to 

know colleagues better; however, trust is 

something built up over time through behaviour. 

If there is no infrastructure in place 

to support teamwork back in the workplace, 

then there will be no teamwork — however 

expensive the intervention,” says Purvis. 

Team-building exercises play with 

metaphors of the workplace, but a workplace 

culture needs to be built on concrete 

realities, such as competitive compensation, 

decent vacation time and investment 

in training and skills development, says 

Seijts. 

LOOKING WITHIN 

Thinking inside the box may also have benefits 

when it comes to team building. Daniel 

Torchia, managing director of Torchia Communications, 

a small communications firm 

in Toronto and Montreal, allows employee 


personalities and interests to determine 

appropriate team-building excursions. 

“We look at what our colleagues do 

on their own free time: what passions they 

have, what keeps them busy outside of 

work. For example, one of our colleagues 

loves theatre and belongs to a theatre 

group, so we took the whole staff out for 

dinner and to a show,” says Torchia. 

The small staff size — there are only 

six people in the Toronto office — is an advantage, 

but larger companies may benefit 

from seeing the individual in team building. 

Flannery Dean is a Toronto-based writer 

and editor. 

Cultural differences can also 

be the cause of some inadvertent 

slips in civility. While a multicultural 

workforce is an asset to an 

organization in many ways, some 

actions perceived as rude by coworkers 

may simply be the result 

of cultural differences. 

Act quickly 

Addressing issues when they first 

arise is key. “What we think, is 

what we feel, is how we act,” says 

Allan. “If small annoyances are not 

addressed, employees’ thinking 

can turn into emotion and then 

turn into action.” 

In many cases, says Allan, it 

is appropriate to address a concern 

verbally, during a company 

meeting. “I would suggest keeping 

the commentary anecdotal, 

reporting comments from a client 

visiting the office, for example, so 

as not to single out any one person 

or department.” 

Follow the code 

Allan recommends adding a “respect 

in the workplace” piece to 

existing codes of conduct, requesting 

input directly from employees, 

so it can reflect what staff 

members would like to see — and 

avoid — in the workplace. 

“If codes of conduct and expectations 

for behaviour and 

communication are clearly outlined, 

it’s easier to hold people 

accountable,” says Bayer. 

Go back to school 

At Aegon Canada, Fiona Betivoiu, 

senior manager of training and 

development, offers training to all 

employees on a regular basis 

about respect in the workplace, 

business and meeting etiquette, 

and communication skills. “We offer 

a leadership certification program 

to our managers focusing 

on the value of coaching, asking 

questions and adapting our communication 

styles. Three months 

after the program is over I check 

up on all graduates to see how 

they are doing, find out if they’re 

asking questions of their staff and 

if they’re adapting to different 

communication styles,” she says. 

Defining a culture for new 

employees as soon as they walk 

through the front door is one approach 

to preventing trouble in 

the future. Allan recommends a 

day of training for new employees, 

during which HR spends time 

talking about what expectations 

are for culture and civility. “This 

kind of investment,” she says, 

“pays handsomely in terms of 

newcomers taking the messaging 

to heart.” 

Model behaviour 

“Much of the time workplaces 

make the mistake of preaching 

about the value of civility or spend 

months trying to define it for their 

specific workplace in an effort to 

get buy-in,” says Bayer. “My experience 

has been that talking about 

it is rarely effective. You just have 

to do it. Focus on the benefits and 

just start making changes.” 

Betivoiu agrees. “From a 

training and development perspective, 

we can offer lots of 

courses and coaching and create 

policies to support a respectful 

workplace.” But for an organization 

to have a truly respectful culture, 

she says, “it has to be from 

the top down. If each senior manager 

coaches his or her direct reports, 

adapts their communication 

style and encourages asking 

questions, there’s a better chance 

that a respectful culture will permeate.” 

She advises HR and the 

training department partner very 

closely with senior management 

to create a respectful coachingbased 

culture. 

Melissa Campeau is a Toronto-based freelance writer 


’NET ASSETS ▪ Greg Barber, InfoSolutions 

Finding the Media That Matters To You 

Paperless Possibilities 

The paperless office is a path towards productivity and profit 

s today’s “paperless office” really paperless Will office 

workers ever work without paper Despite enormous improvements 

in technology between 1980 and 2000, it’s 

worth noting that worldwide consumption of paper has doubled 

in the same period. Nevertheless, many 

advocates argue that paperless is the 

path towards productivity and profit. So 

how can you take advantage of paperless 

possibilities 

Best Practices 

Alexandra Defelice of Accounting Today 

says “the road to less paper” begins 

by following the best practices of companies 

that have already made the 

transition. If you consider the ways in 

which your company’s paper files are 

organized and you mimic that system 

in an electronic world, you can eliminate 

staff confusion and “reduce the likelihood 

of introducing inconsistencies in 

the way things are filed and named.” 

Training can ensure that employees 

are consistent in their paperless processes. 

Pilot projects, such as the 

paperless preparation of tax returns, 

can smooth the transition. Document 

management vendors can often help 

in mapping work processes. (To read 

“The road to less paper,” visit www. 

accountingtoday.com and enter the title 

in the search box.) 

InfoSolutions 

A BENEFIT FOR CGAS & STUDENTS 

IN THE CGA PROGRAM OF 

PROFESSIONAL STUDIES 

LOOKING FOR INFORMATION TO 

SOLVE A PROBLEM IN YOUR 

BUSINESS, ORGANIZATION OR 

CAREER 

Whether you need company profiles, 

financial data, or articles on 

everything from management trends, 

interview skills or career advice — if it 

exists, the professional research staff at 

InfoSolutions will find it through the wealth 

of resources at the University of Toronto’s 

network of libraries. 

InfoSolutions 

Rotman School of Management 

University of Toronto 

Tel: 416-978-1912 or 

1-800-810-8067 

Fax: 416-978-1920 

Email: infosolutions@rotman.utoronto.ca 

Print Less, Make More 

“Paperless equals profit” is the underlying 

message of “How to save money 

going paperless,” by K.J. McCorry of 

the Colorado Business Journal. Mc- 

Corry observes that “the easier it is for 

employees to print, the more likely it is 

that paper use will increase.” Offices 

can make printing less convenient by removing individual desktop 

printers and installing high efficiency “group” printers. 

McCorry also suggests downsizing the number of paper 

files retained and saving documents electronically. (Visit www. 

cobizmag.com and type “paperless” in the search box to read 

the full article.) 

The Risk Factor 

Improving client service, gaining a competitive edge, efficiency 

and effectiveness are the rewards of going paperless (or using 

less paper) but, as Roger Mongeon points out in an article from 

Accounting Technology, there are also some 

risks. These can include “a loss of control, 

biting off more than a firm can chew and 

confusion among accountants and staff 

about their roles in a new, paperless environment.” 

Planning workflow processes and 

preparing for the change can minimize most 

of these issues. Mongeon is also a proponent 

of bringing document management vendors 

in early in the planning process. (You can read 

Mongeon’s entire article at accountingweb. 

com by searching for the title, “The Risks and 

Rewards of Going Paperless.”) 

Is Paperless Right for You 

In a recent AccountingWeb blog, Alexia 

Whitley, a London-based senior audit manager, 

asks “Is a paperless office right for 

you” Whitley offers some good advice: 

“Don’t expect immediate success. Plan to 

spend the first year planning, testing, and 

implementing; the second year ironing out 

kinks and perfecting the systems.” 

But Whitley also offers further benefits of 

going paperless: working remotely is easier 

because electronic documents can be accessed 

away from the office, cleaner and 

clearer workspaces can raise staff morale 

and productivity, and using less paper benefits 

the environment. (To read the complete 

post, visit accountingweb.com.) 

Do you need more information about 

the paperless path towards productivity and 

profit InfoSolutions can help with this or any 

other business topic. Contact us and learn 

about our own paperless possibilities, here 

at InfoSolutions. 

Greg Barber is a business information specialist with InfoSolutions, 

a research service of the Joseph L. Rotman School of Management, 

and a member benefit to CGAs and students in the CGA 

program of professional studies. 


Grant Rowson, CGA ▪ TECH TALK 

Accounting for the Latest Trends in Technology 

How Safe is Syncing and Sharing 

File synchronization services are convenient but safety is a concern 

am a loyal customer of Dropbox, an online backup service 

that allows you to share documents between computers, 

tablets and smart phones. 

When you install its software, Dropbox places a folder on 

your desktop (or anywhere else you choose) that looks and acts 

just like any other folder on your computer. When you move a file 

into your Dropbox folder — Presto! — the program copies the files 

to similar folders on your other computing devices. That’s called 

“file synchronization,” and Dropbox is called a “synchronization 

service,” or “sync service” for short. 

Sync services are a form of cloud computing. You upload 

your files to private servers and your files are automatically downloaded 

to your other computing devices. It’s incredibly convenient. 

No longer do you need to carry countless USB keys or store your 

files on CDs or DVDs. You just transfer and update your files on 

all your devices through the clouds. 

But with all that file sharing going on, one has to ask: How 

safe is syncing and sharing 

Sync Security 

Naturally I’m concerned about the storage of unencrypted sensitive 

data on servers outside my control. I use Dropbox for nonconfidential 

purposes only — saving research notes, web articles, 

white papers and other documents that would be of no consequence 

if they were accidentally disclosed. 

But Dropbox came under criticism recently for security weaknesses. 

Critics drew attention to the fact that the staff at Dropbox 

could, in theory, access customer data if required in the operation 

of the service. Further, they could do so without your knowledge, 

if served with a U.S. government warrant under the Patriot 

Act of 2001. 

Worse still, the San Francisco-based startup experienced a 

four-hour security breach that affected its password authentication. 

For four hours on June 19, 2011, any user could access any 

account using any password. The breach, attributed to a code 

update, was a highly embarrassing and costly incident for a tech 

firm that in 2010 appeared on Business Insider’s list of “20 Hot 

Silicon Valley Startups You Need To Watch.” 

In the end, it turned out that only a hundred or so accounts 

were affected, but the breach called into question the security of 

all sync services, including SpiderOak, SugarSync and Box.net. 

SpiderOak 

The strength of SpiderOak lies in its “zero knowledge” security 

practices. SpiderOak does not store file names, encryption keys 

or passwords, which means that employees and hackers cannot 

steal information related to your syncing and sharing. 

SpiderOak also differs from other syncing services in its functionality. 

While it allows you to designate any folder on your system 

to synchronize (rather than creating a specific folder like Dropbox), 

you have to upload files to SpiderOak first before syncing them, 

rather than simply dragging and dropping files into a desktop application 

that does the job for you all at once. 

Its been called slow and complicated by its critics. You have 

to make sure its utility is running and its backup schedule is set 

according to your preferences. But, on the other hand, you feel 

secure and in control of your data. 

SugarSync 

A strong competitor to Dropbox, SugarSync lacks the strong thirdparty 

application tools and support of Dropbox, but allows you to 

upload from multiple folders (like SpiderOak) and has full web 

transfer capabilities on a variety of mobile devices, including 

Apple and RIM products. SugarSync works well with Documents 

To Go, the office suite for mobile devices that provides document 

synchronization between handheld devices and computers. It also 

provides for direct posting to Facebook Photos. Transferred files 

are stored in the cloud in an encrypted format. 

Box.net 

Finally, Box.net, which recently joined forces with Google to compete 

against Microsoft’s Office 365 in the software as a service 

field, targets the corporate crowd, emphasizing the benefits of 

group collaboration through an online workspace. In terms of security, 

it’s similar to Dropbox and SugarSync, in that it encrypts 

and stores personal information in the clouds. However, if you’re 

concerned about other users (even colleagues) accessing your 

files, you can tag files with an automatic expiry date and apply 

passwords to specific files. 

Products and Price Points 

Of course, these are just the main competitors in a rapidly expanding 

market, and they are all trying to differentiate themselves 

based on features, function, storage space and price. I’m still 

using my trusty Dropbox folder, but I caution you to make sure 

you’re comfortable with the security and privacy policies of your 

chosen sync service. 

Grant Rowson, CGA, is the administrative director of financial 

services & information technology for the Dryden Regional Health 

Centre. In addition to his CGA designation, Grant holds the certified 

information systems (CISA) designation. 


Article ▪ Financial Analysis 

Earnings Growth and Residual Income 

An exploration of the valuation potential of residual income, 

based on “Using residual income to refine the relationship 

between earnings growth and stock market returns,” by 

Sudhakar Balachandran and Partha Mohanram 

Is Residual Income an Indicator 

of Stock Market Returns 

By Partha Mohanram, CGA Ontario Professor, Rotman School of Management 

Content Adapted for Statements by Colin Ellis, Editor 

The following article is a 

condensed, edited version 

of “Using residual 

income to refine the relationship 

between earnings 

growth and stock 

market returns,” by Sudhakar 

Balachandran of 

the Columbia Business 

School and Partha Mohanram, 

the CGA Ontario 

Professor of Financial Accounting 

at the Rotman 

School of Management, 

University of Toronto. 

arnings and earnings growth have long 

been viewed as fundamental determinants 

of stock returns, yet accounting 

scholars have cautioned that earnings growth 

should be interpreted with care. Accounting earnings 

are an incomplete measure of firm profitability 

because they do not reflect the opportunity cost 

of the capital employed. Residual income (RI) is 

instead a better proxy for economic profits as it 

includes a charge for capital employed. 

Our paper used the concept of residual income 

to separate (“decompose”) earnings growth 

into growth in residual income, growth in invested 

capital, and other components. We conducted our 

tests using a sample covering the period from 1975 

through 2008, relying entirely on publicly available 

information from two databases, the Compustat 

annual file and the Center for Research in Security 

Prices (CRSP) monthly returns file. 

The findings showed that RI is a powerful indicator 

of stock market returns. 

EARNINGS GROWTH 

Accountants have long cautioned that earnings 

growth should be interpreted with care, because 

income statements do not reflect the full cost of 

capital invested in a firm, which can cause income 

to grow even for firms that invest in negative net 

present value projects. 

For example, a firm might grow net income by 

investing in projects that generate enough profit 

to cover the cost of debt, but not the total cost of 

capital. Similarly, a firm might hoard excess cash 

on its balance sheet and earn interest from this 

excess cash, increasing net income but generating 

returns lower than the opportunity cost of shareholder 

funds. 

A valuation framework that relies on earnings 

growth but does not distinguish between different 

sources of growth assumes that all growth is equally 

valuable to shareholders. However, in reality, earnings 

growth from some sources may be more valuable 

than others. 

The standard specification used to analyze the 

relationship between returns and earnings is one 

developed by Professors Peter Easton and Trevor 

Harris (“Earnings as an explanatory variable for 

returns,” in the Journal of Accounting Research, 

1991). The specification expresses stock returns 

as a function of the level of earnings and growth 

in earnings. 

This model, however, does not have the ability to 

distinguish between firms that increase accounting 

earnings while increasing shareholder value and 

firms that may be increasing accounting earnings 

but destroying shareholder value. 

RESIDUAL INCOME 

Residual income is instead a natural starting 

point to refine the relationship between earnings 

and stock returns. If returns to shareholders are a 

function of growth in the economic profitability of 

the firm, then incorporating a superior measure of 

economic profitability can potentially improve the 

ability to explain stock returns. 

Residual income starts with accounting income 

and incorporates a charge for the opportunity cost 

of the capital employed, thereby correcting an inherent 

incompleteness in accounting earnings. 

Prior research has typically defined RI as net 


operating profit after tax (NOPAT) for the period less 

a charge for invested capital (IC) at the beginning 

of the period, which is typically represented as a 

weighted average cost of capital (WACC) times IC. 

Since the 1960s, accounting scholars have 

viewed residual income as a more appropriate 

indicator of firm profitability. Professor Robert Anthony, 

the late member of the Harvard Business 

School and the Accounting Hall of Fame, noted that 

firms often consider the cost of capital for internal 

decision making. 

Anthony argued that, “In management accounting 

it is quite usual to take into account the 

cost of equity capital; indeed, unless it did so, a 

company’s management would have difficulty in 

planning effectively and maintaining control.” He 

supported the use of RI to analyze firm profitability 

by arguing that “the financial community would be 

better able to judge the company’s results if the 

reports it analyzed recognized these costs.” 

Accounting scholars have used RI to develop 

structural models to value firms. These residual 

income valuation models have been empirically 

used to estimate the intrinsic value of the firm 

and estimate implied cost of capital. Given the 

vital importance accorded to RI by prior literature, 

our study sought to use it as a basis to refine the 

relationship between returns and earnings. 

RESIDUAL INCOME AND RETURNS 

The market appears to value earnings growth from 

RI as well as earnings growth from IC, though it is less 

optimistic about earnings growth in smaller firms. 

Findings also suggest that the market believes that 

investments made by firms with the greatest recent 

profitability are more likely to add value. 

The market, however, does not place the same 

weight on each component. The relationship is 

stronger for growth in RI. This suggests that the 

stock market views earnings growth from RI as 

more valuable than growth in IC. 

To understand why markets view growth in RI 

as more valuable, we analyzed the persistence of 

earnings growth. We found that earnings growth 

is likely to be more persistent when the proportion 

of earnings growth coming from growth in RI 

is greater — and more likely to reverse when the 

proportion coming from invested capital is greater. 

The results lend support for the use of growth 

in RI as an appropriate measure of growth in profitability, 

because it accounts for the opportunity cost 

of funds. This is consistent with arguments made 

by accounting scholars who have enumerated 

the shortcomings of earnings-based measures of 

profitability and advocated for the use of RI as an 

alternative measure of profitability. 

CONTEMPORANEOUS REACTION 

Prior research has shown that the contemporaneous 

reaction of markets is often incorrect. Markets 

often underreact to certain kinds of information, 

as seen in post–earnings announcement drift 

(PEAD), a longstanding anomaly that conflicts with 

the concept of market efficiency. Markets can also 

overreact to other kinds of information, as seen 

in the naïve extrapolation of accruals, the subject 

of “Do stock prices fully reflect information in accruals 

and cash flows about future earnings” by 

Professor Richard Sloan. 

We analyzed the relationship between the 

components of earnings growth and future returns, 

and found that markets contemporaneously underreact 

to growth in RI and overreact to growth in IC. 

In time, however, the market reverses its initial 

favourable assessment of earnings growth from 

growth in IC as it realizes that such growth does 

not persist and instead reverses. 

This corroborates prior research that documents 

negative returns in the aftermath of investments 

such as mergers and acquisitions and capital 

expenditure. 

THE ECONOMIC SIGNIFICANCE 

To analyze the economic significance of our results, 

we tested a trading strategy based on going long 

in firms with the most growth in residual income 

and going short in firms with the greatest growth 

in invested capital. We found that such a strategy 

generates economically meaningful hedge returns 

that are consistent across time, robust to controlling 

for risk factors and incremental to other documented 

anomalies. 

Consistent with this, we found that the persistence 

of future earnings increases in the proportion 

of earnings growth due to growth in RI and 

decreases in the proportion of earnings growth 

due to invested capital. 

When we examined the relationship between 

the components of earnings growth and future 

returns, we found that, while the growth in the RI 

component is positively associated with future returns, 

the growth in invested capital component is 

negatively associated with future returns. 

The positive relationship between growth in 

RI and stock returns is consistent with the contention 

that RI is an informative metric of economic 

performance for shareholders. But in contrast to 

prior research, our research showed that RI visà-vis 

earnings need not be viewed as competing 

measures. 

The value of RI lies as an effective conditioning 

variable that helps us better understand the sources 

of earnings growth. 

Partha Mohanram is 

the CGA Ontario Professor 

of Financial Accounting 

at the Rotman 

School of Management 

at the University 

of Toronto. Sudhakar 

Balachandran is the 

Assistant Dean for 

Teaching Excellence 

at Columbia Business 

School in New York. 

“Using residual income 

to refine the relationship 

between earnings 

growth and stock 

market returns” will be 

published in the Review 

of Accounting Studies, 

2012. The paper was 

edited for the purposes 

of this article 

by Colin Ellis, editor of 

Statements. 

To view selected articles 

and papers authored by 

Professor Mohanram, 

visit the “Faculty + 

Research” section of 

the Rotman School of 

Management website at 

www.rotman.utoronto. 

ca. We encourage all 

CGAs in academia to 

submit their papers to 

Statements. Papers 

will be edited to article 

form for a general 

readership. 


Article ▪ Standards 

Public Sector Handbook Update 

A summary of changes recently released by the Public Sector Accounting Board 

he Public Sector Accounting Board released a number 

of changes to the Public Sector Accounting (PSA) Handbook 

last spring. The Handbook release included new accounting 

standards for recognition, measurement and disclosure 

of financial instruments and the presentation of the associated 

gains and losses. It also included consequential amendments 

arising from the introduction of the new standards. 

All the new requirements are to be applied at the same time 

and for government organizations are effective for fiscal years 

beginning on or after April 1, 2012. In the case of governments, 

the new requirements are effective for fiscal years beginning on 

or after April 1, 2015. Earlier adoption is permitted. 

Financial Statement Presentation, Section PS 1201 

This section revises and replaces FINANCIAL STATEMENT PRE- 

SENTATION, Section PS 1200. The following changes have been 

made to the section: 

• Remeasurement gains and losses are reported in a new 

statement. 

• Other comprehensive income that can arise when a government 

includes results of government business enterprises 

and government business partnerships in its summary financial 

statements is reported in the statement of remeasurement 

gains and losses. 

• The accumulated surplus or deficit is presented as the total 

of the accumulated operating surplus or deficit and the accumulated 

remeasurement gains and losses. 

Foreign Currency Translation, Section PS 2601 

This section revises and replaces FOREIGN CURRENCY TRANSLA- 

TION, Section PS 2600. The following changes have been made 

to the section: 

• The definition of currency risk is amended to conform to the 

definition in FINANCIAL INSTRUMENTS, Section PS 3450. 

• The exception to the measurement of items on initial recognition 

that applies when synthetic instrument accounting is 

used is removed. 

• At each financial statement date subsequent to initial recognition, 

non-monetary items denominated in a foreign 

currency that are included in the fair value category in accordance 

with Section PS 3450 are adjusted to reflect the 

exchange rate at that date. 

• The deferral and amortization of foreign exchange gains 

and losses relating to long-term foreign currency denominated 

monetary items is discontinued. 

• Until the period of settlement, exchange gains and losses 

are recognized in the statement of remeasurement gains 

and losses rather than the statement of operations. 

• Hedge accounting and the presentation of items as synthetic 

instruments are removed. 

Financial Instruments, Section PS 3450 

This new section establishes standards for recognizing and measuring 

financial assets, financial liabilities and non-financial derivatives. 

The main features of the new section are: 

• Items within the scope of the section are assigned to one of 

two measurement categories: fair value, or cost or amortized 

cost. 

• Almost all derivatives, including embedded derivatives that 

are not closely related to the host contract, are measured 

at fair value. 

• Fair value measurement also applies to portfolio investments 

in equity instruments that are quoted in an active 

market. 

• Other financial assets and financial liabilities are generally 

measured at cost or amortized cost. 

• Until an item is derecognized, gains and losses arising due 

to fair value remeasurement are reported in the statement 

of remeasurement gains and losses. 

• Budget-to-actual comparisons are not required within the 

statement of remeasurement gains and losses. 

• When the reporting entity defines and implements a risk 

management or investment strategy to manage and evaluate 

the performance of a group of financial assets, financial 

liabilities or both on a fair value basis, the entity may 

elect to include these items in the fair value category. 

• New requirements clarify when financial liabilities are 

derecognized. 

• The offsetting of a financial liability and a financial asset is 

prohibited in absence of a legally enforceable right to set 

off the recognized amounts and an intention to settle on 

a net basis, or to realize the asset and settle the liability 

simultaneously. 

• New disclosure requirements of items reported on and 

the nature and extent of risks arising from financial 

instruments. 

Archived Pronouncements 

Superseded Sections PS 1200 and PS 2600 and withdrawn PSG-6 

are refiled under Archived Pronouncements. 

Supplements have been added in Archived Pronouncements 

setting out the former wording of those paragraphs. 

The archived material will be withdrawn from the Handbook 

when it is no longer effective. 


Flavian Pinto, CGA ▪ THE PUBLIC SECTOR 

What’s Happening in the World of Government and Not-For-Profit 

Pooled Pension Plans 

Saskatchewan’s model offers a glimpse into the future of national pensions 

ere you paying close attention to the summer strikes 

at Air Canada and Canada Post As a public sector 

CGA, I had a couple of excellent reasons for watching 

the strikes with more than just a passing professional interest. 

First, the chief executive officer of Canada Post is a certified 

general accountant: Deepak Chopra, FCGA. Second, the strike 

at our national letter carrier and the strike at our national people 

carrier have kept alive an important national conversation about 

pension plans. 

A major reason behind both strikes was a proposal to move 

future employees from Defined Benefit (DB) pension plans to Defined 

Contribution (DC) plans. You know the DB/DC difference, 

of course: DB plans are the ones the media likes to refer to as 

“Cadillac plans” and “gold-plated pensions,” while DC plans are 

glorified RRSPs. 

Both Air Canada and Canada Post are struggling with massive 

pension deficits. Air Canada now has more retired employees 

(29,000) than it has active employees (26,000) to support them. 

Canada Post reminds one of Blockbuster. It’s a business that 

seems more and more irrelevant in this age of electronic delivery. 

Yet the Crown corporation deserves our close attention, because 

it’s facing a pension deficit of more than three billion dollars, a 

deficit for which the Canadian taxpayer is ultimately liable. 

The solution proposed by both employers to their employees 

is two-tier: one for the old, one for the new. Current employees 

would remain in the existing DB plan while new employees would 

receive the DC plan. The DB plan would continue to pay out a guaranteed 

amount of money to older employees in their retirement. 

The DC plan just gives you a lump sum of money as you 

embark upon your golden years. How much you invest and how 

much you withdraw is up to you. Frankly, most Canadians don’t 

have the investment know-how to grow their funds sufficiently for 

retirement anyway, and many will wind up with little or no retirement 

funding. 

No wonder DB plans are considered more valuable to some 

people than their homes. They’re becoming an increasingly rare 

and precious asset. 

Disappearing Pension Plans 

Only a third of Canadians are covered by an employer-sponsored 

pension plan. That extends to the public sector, where many of 

the agencies providing health and social services cannot afford 

to provide their employees with pension plans, whether DB or DC. 

To make matters worse, a third of all Canadians have no 

RRSP savings at all. This includes everyone from homemakers 

to the self-employed to those working in low-wage industries. And 

those with RRSPs ain’t socking away the cash like they used to. 

Instead, as widely reported in the media, they’re carrying record 

levels of debt. 

A Possible Solution 

Recent talk of pension reform between the provinces and federal 

government has led to the proposal of a pooled registered 

pension plan. The goal is to help middle-income private sector 

workers by allowing small and medium-size businesses to share 

resources and cut costs. 

Is there a privately pooled pension plan out there Is it possible 

to see what the future may look like under a privately pooled 

pension fund 

Yes there is. The Saskatchewan Pension Plan (SPP) is a voluntary 

program that has been in operation for 25 years. You don’t 

have to live in Saskatchewan to join the SPP and it’s operated at 

arm’s length from the government by an independent board of 

governors. Until recently, the maximum annual contribution was 

$600 a year, but as of 2010 members can annually contribute 

up to $2,500, providing they have the RRSP contribution room. 

DC employers can also add the SPP to their benefits package 

and contribute all or part of the $2500 to an employee’s account. 

The account stays with the employee until they retire and does not 

change when they change employers. Because the SPP is a pension 

plan and not an RRSP, contributions are locked in until age 

55, but its flexibility and portability as a pension are very good. 

A Successful Model 

The SPP relies on investment managers to ensure a high return 

with low management expense ratios of less than one per cent. 

Since its inception in 1986, it has earned a rate of return of about 

eight per cent. 

Very few mutual funds can claim that kind of performance. 

For those looking to diversify, the SPP is an attractive option if 

an individual is looking for a professionally managed investment 

vehicle outside of their RRSP. 

When SPP members retire, they can choose to buy an annuity 

and receive a reasonable monthly payment. It’s another option 

in retirement planning and a possible model for a better future 

than the one we have now — a glimpse into the future of national 

pension plans. 

Flavian Pinto, CGA, is chief financial and chief information officer 

of Community Living Toronto. Flavian has 30 years of public sector 

experience in the health care management field. 


Notes to Statements 

D I S C I P L I N E N O T I C E S 

DUE CARE AND 

PROFESSIONAL 

JUDGMENT 

CGA Ontario’s Code of Ethical 

Principles and Rules of 

Conduct (“the Code”) provide 

standards of acceptable 

behaviour that apply to all 

members of the Association 

and students in the CGA program 

of professional studies. 

The “Due Care and 

Professional Judgment” section 

of the Code states that 

“Members shall strive to 

continually upgrade and develop 

their technical knowledge 

and skills in the areas 

in which they practise as 

professionals. This technical 

expertise shall be employed 

with due professional care 

and judgment.” 

This section comprises 

five rules: R301, Competence; 

R302, Professional 

Development; R303, Adherence 

to Acknowledged Principles 

and Standards; R304, 

Terms of Engagement; and 

R305: Sufficient Information. 

(To read the Code of 

Ethical Principles and Rules 

of Conduct in their entirety, 

visit “Serving the Public” at 

cga-ontario.org.) 

Gougeon, Andre 

Andre Gougeon of the Town 

of Wasaga Beach was found 

in breach of Rule 302, Professional 

Development; Rule 

514, Registration; Rule 515, 

Practice Inspection Requirements; 

Rule 516, Professional 

Liability Insurance; 

and Rule 601, Compliance; 

of the Code. 

Mr. Gougeon did not satisfy 

the Association’s mandatory 

continuing professional 

development requirements 

for 2009. As well, he provided 

professional services 

to the public though he was 

not permitted to do so as he 

was not registered in professional 

practice with the 

Association. 

The following penalties 

were proposed and accepted 

by Mr. Gougeon: 

1. A reprimand. 

2. Payment of $5,000, consisting 

of a fine and the 

costs of the Public Practice 

Manual, CICA Handbook 

and professional 

liability insurance that 

should have been purchased 

for the years 

2009 and 2010. 

3. Suspension of membership 

in the Association 

for a period of six 

months. 

4. Return of CGA Ontario 

and CGA Canada membership 

certificates to 

the Association. 

5. Publication in Statements 

and a newspaper 

in the geographic area of 

Mr. Gougeon’s place of 

practice. 

Mathieson, Neil 

Neil Mathieson of the City 

of Mississauga was found 

in breach of the Principle of 

Due Care and Professional 

Judgment, and Rule 402, Association 

with Financial Information, 

of the Code. 

Mr. Mathieson’s client 

instructed him to file a notice 

of objection in response to 

an audit by Canada Revenue 

Agency (CRA). Though Mr. 

Mathieson advised his client 

that he filed the notice of objection, 

he was unable to provide 

confirmation of delivery 

of notice and the CRA did not 

receive a copy. In failing to 

either file the notice of objection 

on time, keep a copy 

of the notice, obtain some 

proof of delivery or file for an 

extension, Mr. Mathieson did 

not act with due care and 

professional judgment. 

Mr. Mathieson was 

aware that his client did not 

keep appropriate records 

to support his income or 

expenses. Though he did 

not have credible or reliable 

documentation from the 

client, Mr. Mathieson continued 

to prepare corporate 

financial statements, corporate 

income tax returns and 

personal income tax returns 

for his client and his client’s 

companies. 

While it was recognized 

that Mr. Mathieson’s intention 

was not to prepare or 

file misleading information, 

Mr. Mathieson remained 

involved when he knew or 

ought to have known that 

there was no credible or 

reliable information or documentation 

to support the 

filings. He was reprimanded 

and fined $1,000. 

Publication of 

Disciplinary 

Decisions 

Conditions related to the publication of disciplinary 

decisions are addressed in Article 9 of 

the Bylaws of the Certified General Accountants 

Association of Ontario. 

“Complaints, Discipline and Capacity” begins 

with the statement (“section 1”) that “All 

members, firms and students of the Association 

are required to comply with the Code of 

Ethical Principles and Rules of Conduct of the 

Association.” 

Article 9, section 41(a) states (in part), “The 

Association shall promptly release to the public 

and to members all hearing tribunal and 

appeal tribunal orders, decisions and reasons 

with respect to a member, a licence, or the certificate 

of authorization of a firm where there 

has been a finding of incapacity, incompetence, 

professional misconduct [emphasis added] or 

conduct unbecoming or where a student has 

been expelled from the Association’s program 

of professional studies.” 

If the tribunal orders suspension or explusion, 

as per section 41(b), the “Notice of suspension 

or expulsion of a member, the suspension 

or revocation of a licence or the certificate 

of authorization of a firm, or the placing of a 

restriction on the member’s or the firm’s practice 

shall promptly be given to the public by 

publication on the Association’s website and 

in a newspaper or newspapers distributed in 

the geographic area of the member or firm’s 

current or former practice, employment and/ 

or residence, or in such other manner as the 

Association may determine to be appropriate.” 

To read the Association Bylaws, Code of 

Ethical Principles and Rules of Conduct, Public 

Accounting Licensing Regulations, and Procedural 

Rules for Hearings in their entirety, visit 

“Serving the Public” at cga-ontario.org. 


Communication Skills ▪ Article 

A Proper Introduction 

An effective introduction sets the stage for a successful presentation 

here’s an old adage that states, “Well begun is half 

done.” When introducing a speaker, the introduction 

and the speaker’s opening remarks should fit together 

so seamlessly that the stage is set for a successful presentation. 

I recently attended a luncheon where the speaker was a candidate 

in an upcoming election. This was his introduction: “I would 

like to introduce our speaker, Joe Smith, your candidate for...” 

I cringed because I knew Joe. A successful restaurateur, he 

was very involved in local tourism, held a position on the local 

chamber of commerce and participated regularly in a variety of 

charity events. 

None of this was mentioned in his introduction. The poor man 

spent the first third of his speech trying to win over his audience. 

Introducing the Rules 

There are two rules with introductions. First, if you’re the speaker, 

write your introduction yourself. It should state your reasons for 

speaking on the chosen topic, summarize your background, and 

provide your audience with a reason to listen to you. Make the 

print easy to read and give it to the person introducing you. 

Second, make your introduction set the tone for your speech. 

I learned this at the School of Hard Knocks. When I first began 

public speaking (on the power of humour in the workplace), I tried 

to make my standard introduction sound as professional as possible, 

because I was trying to appeal to professional organizations. 

I was introduced as a professional accountant with a college 

degree in business administration who had held various corporate 

leadership positions. 

Bo-ring! 

It didn’t sound as though I was even remotely capable of 

humour. And I was well into my presentation before I got my first 

laughs. 

Priming the Pump 

So I changed my introduction. It still mentioned my accounting 

past, but I was now described as a “reformed accountant.” 

It mentioned my involvement with Toastmasters, the public 

speaking and leadership development organization; that I had 

won a number of humorous speech contests; and the fact that I 

was a seminar leader on the power of humour in the workplace. 

Listeners not only heard my name, they saw me laugh at the 

introducer’s joke (which I wrote) and they heard the word “humour” 

several times. They expected me to be funny. The introduction 

primed the pump, so to speak, and it was easier to make the 

audience laugh. 

In 1996 I was chair of the opening night festivities for Toastmasters 

District 60 Spring Conference. The international president 

and his spouse were in attendance. I used most of my standard 

introduction but added the comment, “Bob was a winner in the 

1991 District 60 Contest. He would have also won in 1993 if it 

hadn’t been for the judges.” This customized comment got a big 

laugh and prepared the audience to laugh even more. 

Setting the Right Tone 

If you are speaking on a serious topic such as drug addiction, 

however, you don’t want your introduction to be a series of oneliners. 

Again, your introduction should set the right tone for your 

speech. Start with a startling statistic, a personal story or rhetorical 

question. 

Your introduction and opening should work together. In my 

case, I ride in on the humour theme and use some self-deprecation. 

I usually make light of what I do for a living. After my opening, the 

audience is ready not only to hear my message but to have some 

fun as well. 

Starting a speech off right does not happen by accident. 

Unless you are a celebrity, the audience won’t know you or your 

message. They must be told in a direct manner who you are and 

why you are qualified to speak to them. 

But they must also be told — subtly and indirectly — why they 

should listen and how they should respond. 

Review your introductions and openings. Imagine yourself in 

the audience. Would you pick up on the subtle signals of direction 

from the information given Would you be primed to respond in 

the proper manner 

Well Introduced, Half Produced 

When it comes to a proper introduction, that old adage, “Well begun 

is half done,” should read “Well introduced is half produced.” 

As certified general accountants, we make presentations 

and give speeches on a regular basis, because our reputations 

as professionals make us ideal candidates for delivering many 

messages — technical, motivational, inspirational or otherwise. 

The next time you are asked to give a speech, give some 

thought as to how you should be introduced. 

I guarantee you: An effective introduction will set the stage 

for a successful presentation. 

Bob Armstrong, the author of this article, passed away in February 

2011. A certified general accountant for more than 25 

years, Bob was a popular seminar speaker who specialized in 

presentation skills and motivation. His obituary appeared in the 

June/July 2011 issue of Statements. 


INTRODUCING CGA ONTARIO’S 

PROFESSIONAL DEVELOPMENT 

FOR 2011/2012 

Quality programming, quality speakers, quality venues 

promise you more skills, more knowledge, more success! 

Visit the professional development section at cga-ontario.org 

and read our digital PD Catalogue today. 


Professional 

Development. 

More Skills. 

More Knowledge. 

More Success.

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