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.
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I absolutely agree with your reflection. If Canada doesn't protect its economy from fraud, how can we trust in our own market? Ultimately, how can countries around the world trust and invest in our market? I'm actually quite shocked that Canada is becoming known for fraud, and when people are caught, they are not are not being punished enough. I remember my Social Studies teacher telling me that the Canadian government believes in "second chances," and maybe that is why Canada’s penalty system is very loose. That has to change.
ReplyDeleteZooming out to take a look at the big picture, dishonesty in companies has been a big issue. This type of dishonesty was supposed to be stopped by GAAPs, but it seems as though these set of rules are being broken very easily. The problem is that GAAPs are not law, and therefore it is enforced by auditing agencies and other accounting related agencies, not the federal government. I think it is time for the Canadian Government to step in and solve the problem…
-Clement Ip
I totally agree with you RyanW! Your observations were right on point and your reflection of this article is similar to how i would look at it. I don't think anyone would want to associate themselves with a market that is known for fraud. Moreover, even if you were to associate yourself in the market and there was a problem with fraud, the sentance wouldn't be that harsh meaning fraud would occur even more than it would. the punishment for being caught isn't stern enough for certain people to stop with the crimes, punishment are suppose to be a way to scare people from carrying out the crime. I believe Canada would have a hard time with it's market if this continues to happen.
ReplyDelete- aniDer vu ! :D