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, 2021 (in April 2020, the AcSB deferred the application date from 2020 to 2021). 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.

Download the document below.

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.

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.

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.