Feds promise jail time for major fraud

http://www.cbc.ca/money/story/2009/09/15/white-collar-crime015.html

Summary: The article that i have just read explains that Canada has become known for the place for fraud. This is because of the lack of legislation that has been used against previous counterfeiters. The Federal Government plans to present a more serious legislation composed of mandatory penalties for fraud to allow longer sentences. Unfair penalties such as house arrest for only white collared workers will finally be abolished causing a more fair enviroment. In Canada, people currently that are convicted of fraud only serve one-sixth of the original sentence. For these reasons, Canada is considered to be lax on this type of crime, which definitely has to change. On Monday, two men from Alberta were convicted with fraud after using a Ponzi-type scheme that profited more than $100 million from investors all around the world. Tougher penalties seems to be the only resolution to hopefully raise the standards of Canada's protection against fraud.

Connection: The Major connection that i have found between this article and the textbook is the Generally Accepted Accounting Principles (GAAP). In the text book it states that the GAAP's consist of three main principles, the business entity concept, the continuing concern concept and the principle of conservatism. This article of fraud connects directly with the principle of conservatism because it states that accounting for a business should be fair and reasonable. An example of breaking this principle would be to overstate your profits and assets to present a fake image to your investors.

Reflection: After reading this article I feel very reluctant to entering the Canadian market due to reading about the numerous fraud crimes. If Canada does not protect its' economy how can we trust and have faith in our own market. It will also affect our investors around the world because they will be unsure if our market is legit. This will just be another obstacle that will make overcoming the recession even harder due to the lack of trust in our Canadian businesses.