In December 2018, the Canadian Accounting Standards Board (AcSB) amended Section 3856, Financial Instruments, to review, in particular, requirements regarding financial assets originated or acquired and financial liabilities issued or assumed in a related party transaction (hereafter, “related party financial assets and liabilities”).

The amendments apply to fiscal years beginning on or after January 1, 2020. They apply to entities that prepare their financial statements in accordance with Accounting Standards for Private Enterprises (ASPE) or Accounting Standards for Not-for-Profit Organizations (ASNFPO).

This issue of Flash provides a summary of the main amendments. However, it does not deal with all aspects of the accounting for related party financial assets and liabilities and the related requirements. Readers are encouraged to refer to Section 3856 before making any decisions.

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Guillaume Caron
Chief Executive Officer VARS - Cybersecurity | Digital and technology consulting

To guard against phishing and other cyber-attacks, SMEs need to invest in IT security. Is your business prepared?

Cybersecurity has become a major issue in today’s markets. The growth of your business, and perhaps even its survival, depend on it, because a cyber-attack can have serious consequences. Beyond the ransom payment, it can cause, among others:

  • the shutdown of the company’s activities;
  • litigation;
  • loss of trust with clients and partners.

No organization is safe: 71% of Canadian businesses were victim to a cyber-attack that had an impact on their organization in 2019. This statistic only includes businesses that reported an incident.

Protect yourself from phishing and data theft

Did you know that hackers are often present for more than six months, without your knowledge, before triggering more serious attacks?

Many SMEs are not sufficiently protected against cyber-attacks. Cybercriminals target them, in part because they act as a gateway to the large companies they do business with.

SMEs can fall victim to several types of incidents. Through phishing, hackers can:

  • gain access and break into the computer network in order to steal data;
  • access e-mail accounts (imagine the consequences if a cyber hacker manages to send a message to your customers from your e-mail address asking them to pay you for a new bank account);
  • disable corporate defence systems;
  • affect data backup systems.

SME Solutions - Relance RCGT

Ransomware, a new form of fraud

Ransomware is another common type of threat, especially since the emergence of cryptocurrency, which now allows cybercriminals to monetize their actions in an undetectable way.

In the classic scenario, cybercriminals break into a company’s computer system and paralyze it by encrypting files. They then demand a ransom to unlock the system but, in the meantime, the company may have to shut down all operations.

Moreover, there is no guarantee that the hackers won’t start their game again a few days later or that they haven’t deleted all the company’s strategic data.

Secure your data to stay competitive

Does your company meet the minimum cybersecurity requirements that must now be included in calls for tenders? If not, many contracts are in danger of slipping through your fingers.

Given the frequency and scale of cyber-attacks, large corporations and public organizations want to ensure that their suppliers have information security controls in place and that they comply with increasingly stringent industry standards.

In order to remain competitive and do business with large companies and organizations, including governments, it is essential that your company include cybersecurity measures in its strategy.

Prepare a plan to prevent security incidents

A business interruption due to a cyber-attack could prove costly to your business. To protect yourself from the consequences, it is important to prepare an adequate incident response and business continuity plan. Being prepared for any eventuality will make a huge difference in the event of an attack. As the saying goes, an ounce of prevention is worth a pound of cure.

Prevent financial losses

The financial losses associated with the partial or total suspension of your activities can be very high. In addition to the direct costs (resources devoted to responding to incidents, lost data and contracts, ransom payments), you may also have to pay fines, particularly if you violate the Personal Information Protection and Electronic Documents Act.

Remain vigilant and invest upstream rather than incurring excessive expenses.

Maintain the bond of trust with your customers and partners

Of course, the theft of personal information and sending of false messages to customers and business partners as a result of e-mail account hacking are extremely damaging to a company’s credibility.

Did you know that 81% of Canadians would never do business with an organization if their personal data had been compromised during a cyber-attack?

It is all the more important to preserve your reputation by properly equipping your company against cyber-attacks and other computer security incidents.

Avoid costly lawsuits

SMEs that are victims of a cyber-attack are exposed to lawsuits and litigation from their customers and business partners. This could be the case, for example, following the theft of personal information or if a paralyzed SME can no longer honour its contracts.

Establish a computer incident response plan to preserve and document evidence to defend yourself in the event of a lawsuit.

Conserve your resources to take advantage of business opportunities

An SME that has to work hard to recover from a cyber-attack may postpone or even cancel an important project because it no longer has the time or resources to carry it out.

Although the threats are numerous and serious, SMEs can protect themselves adequately by calling on specialized resources that will provide them with state-of-the-art solutions and tailor-made strategies. Do you have questions about this? Please contact us for more information.

28 Feb 2020  |  Written by :

Guillaume Caron is a cybersecurity expert at Raymond Chabot Grant Thornton. Contact him today!

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Marie Cayer
Manager | CPA, CA | Management consulting

Do you think the digital shift only pertains to the manufacturing industry? Make no mistake: it affects businesses in all sectors.

A 4.0 transformation is essential for your business in order to increase your competitiveness, regardless of your industry: retail, services, tourism, bio-food or other.

Competitive advantages for your business

Integrating digital technologies makes it possible to significantly improve all of the organization’s processes, in terms of both operations and the customer experience.

There are numerous benefits to the 4.0 transformation, such as:

  • Responding to your customers’ needs more quickly and forging stronger ties with them;
  • Attracting and retaining talent within your organization through an enhanced technology experience;
  • Increasing your production capacity and product quality;
  • Reducing your costs by automating activities and improving the flow of information within your organization.

Businesses with high digital maturity are 62% more likely than their peers to have experienced strong sales growth over the past three years.

What does a digital shift entail?

This advancement, called “digital transformation”, “4.0 shift” or “industry 4.0”, consists of using new technologies to increase communication between your organization’s various components (individuals, machines, products, suppliers, distributors, etc.).

In other words, it is about optimizing the organization’s processes and services to make it more competitive, through the acquisition, processing, evaluation and interpretation of data.

What can the digital transformation do for you?

Here are tangible examples of the benefits of the 4.0 shift in different activity sectors.

Retail sales

The integration of digital technologies enhances the customer experience by allowing consumers to view inventory status, configure products, evaluate delivery times and track the progress of products.

For example, a clothing retailer could offer its customers the opportunity to integrate a photo of themselves into its online shopping platform so that they can virtually try on certain models, sizes and colours of clothes they are interested in. The customer process could then be automated all the way through to the transaction and shipping.

Distribution

The customers of a building materials distributor, for example, could have access, via the Web, to all the products that are offered, with an illustration and their various characteristics. Customers could also find out about inventory availability, order and pay for products online, and then track the shipment progress.

Tourism

Imagine air flights are cancelled due to a snowstorm. Using artificial intelligence tools, a travel agency could automatically identify affected customers, offer them new flights, re-plan their travel itinerary and change their hotel reservation.

Manufacturing

By installing sensors on machines, real-time data can be collected and production can be proactively monitored to identify and correct problems. Another application: monitoring production with cameras makes it possible to check product quality and automate the reject process.

Agri-food

Automating farming activities and using data can help increase yields and reduce production costs, among others. For example, there are a growing number of applications for continuously monitoring the growth and health of animals and automatically regulating their diets based on the data collected.

Transformation through a step-by-step process

You have to prepare for a digital shift. It’s best to go gradually, without skipping any steps and by prioritizing projects according to your resources (human, material, technological and financial) and your ability to manage this change.

  • Think about your needs, the processes to be improved and how to stay competitive;
  • Define your strategic objectives;
  • Prepare a complete organizational diagnosis.

This diagnosis is carried out by means of an industry 4.0 audit, which is used to develop a digital action plan to achieve the strategic objectives.

All industries are now eligible for financial assistance under the Ministère de l’Économie et de l’Innovation du Québec’s Audit Industrie 4.0 program.

Do you have questions about the digital transformation? Our experts will be more than happy to answer them.

27 Feb 2020  |  Written by :

Marie Cayer is a management consulting expert at Raymond Chabot Grant Thornton. Contact her today!

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Jean Gaouette
Partner | CPA, CA | Assurance

It may seem easy to do your own bookkeeping. Yet a lack of knowledge can lead to costly mistakes.

Bookkeeping, a difficult art to master

Bookkeeping can become complex and requires that you master certain subtleties. Omissions or poor bookkeeping could have unfortunate consequences.

It is therefore important to call on an expert for your bookkeeping needs. He will make sure you get all the benefits to which you are entitled while ensuring that you comply with all the tax rules in effect.

Your risk exposure

It is important to meet tax and source deduction filing deadlines. Poor planning could result in penalties, interest payments, or a note in the company’s file. Similarly, accounting for ineligible expenses may also expose you to an audit. Not knowing how or what to answer in the event of an audit could make your situation worse in the eyes of different government levels.

Your benefits

On the other hand, incomplete bookkeeping knowledge could cause you to miss certain credits or deductions to which you are entitled, depending on your activity sector. You could also forget to account for certain expenses to which you are entitled, or account for inputs incorrectly (taxes receivable) and thus declare too much or too little income.

For peace of mind, call on an expert for your bookkeeping.

26 Feb 2020  |  Written by :

Jean Gaouette is an assurance expert at Raymond Chabot Grant Thornton for the Magog office. Contact...

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