Forensic accounting experts Al Rosen and his son Mark Rosen spoke to Schulich ExecEd Alumni members and guests Wednesday and described a harrowing environment for investors following a number of changes to Canada’s regulatory system, including the adoption of International Financial Reporting Standards (IFRS). The changes, they said, open up a whole range of ways that companies can mislead investors and put their money at risk.
Large portions of Canada’s investment environment are changing rapidly. Manipulators are quickly learning how to take advantage of Canada’s increasingly ineffective investor protection system. Both listed stock market entities and private investment schemes are being easily designed to swindle from “investors”.
A series of events over the past 20 years have combined to strip away investor protections:
- a Supreme Court of Canada decision deprived financial analysts of independent corporate reporting;
- non-prosecutions of serious scams and frauds in Canada have encouraged financial tricksters to escalate their activities;
- Canadian lawmakers have clung to archaic “self-regulation”, using seriously conflicted groups to choose “the rules”; consequences are being ignored;
- Canada, unlike the US, adopted International Financial Reporting Standards (IFRS), which gives corporate management extensive power to manipulate financial results, all within the illogical yet legally protected IFRS umbrella; copycat schemes are increasing quickly;
- Provincial governments have been inactive in investigating and prosecuting multi-million dollar thefts; generally, only minor cases are receiving attention;
- Canada does not have a “Minister of White-Collar Crime”; “buck-passing” from most Provinces to the Federal government gets buck-passed at the Federal Cabinet level to the Minister of Finance who buck passes to Canada’s external auditors, who buck-pass to corporate directors, who lobby for protection. Nobody wants to accept responsibility.
Two books were be provided to registered participants at the breakfast: Easy Prey Investors (2017), and Swindlers (2010). They provide several made-in-Canada corporate financial examples, many of which collapsed with multi-million dollar losses to investors. How to protect yourself and your families and others is stressed in both books. The evidence is more than clear; Canada has a huge problem that is expanding.
Simply stated, Canada’s investor protection system has collapsed. Lawmaker neglect is obvious at all crucial points and levels in the country. IFRS has made financial trickery easily and widely available, and nasty usage is
growing, especially in competitive industries and services.
You may be much more out-of-date than you think. Protect your hard-earned savings.
Al and Mark Rosen
Al Rosen is a PhD, FCA, FCMA, FCPA, CFE, CIP and Mark Rosen, is an MBA, CFA, CFE.
Rosen & Associates Limited is one of the premier independent litigation and investigative accounting firms in Canada. Al Rosen has consulted or given independent opinions on over 1,000 litigation-related engagements. He has provided expert testimony or affidavits in jurisdictions across Canada, including the Supreme Court of British Columbia and the Supreme Court of Canada. Al is the author or co-author of several texts on accounting and hundreds of articles in numerous publications.
He has also been an instructor and professor of accounting at the University of British Columbia, the University of Washington, the University of Alberta and York University, serving in many posts, including Area Coordinator and Director of the Master of Business Administration Program.
In addition to having his MBA and PhD, he is a Fellow of the Chartered Professional Accountants of Ontario, British Columbia and Alberta (FCPA), a Fellow of the Society of Management Accountants (FCMA), a Fellow of the Hong Kong Society of Accountants (FHKSA), a Certified Fraud Examiner (CFE), a Chartered Insurance Professional (CIP), a Certified Public Accountant (CPA), and a specialist, Investigative and Forensic Accounting (CA.IFA).