Rsm320 Final Exam Responses-Dheeman Shahri

Dheeman Shahri 1006803979
Question 1
STOCK BASED COMPENSATION- NOTE 25
The quality of Rogers’ stock based compensation note disclosure (Note 25) will be assessed
using characteristics such as materiality, understandability, relevance, transparency and
comparability.
Firstly, the accounting policy section of Note 25 helps users better understand the inner-workings
of cash settled appreciation rights (SARs), restricted share units (RSUs), deferred share units
(DSU) and the employee share accumulation plan. The note begins with explaining the function
of SARs, which not only increases the understandability of this compensation component but
also helps users transparently obtain knowledge about how outstanding stock options are
classified using the Black Scholes model. It is also noted in this section that RSUs and DSUs are
considered as liabilities which are recognized as “charges to operating costs”1. Although, there is
a brief explanation given about each component of stock based compensation, for those who do
not have an accounting background, this section may still be hard to follow as there is complex
terminology used throughout.
Moreover, it is mentioned in the Estimates section that “significant management estimates were
made to determine the fair value of the stock option”2. This fails to give enough clarity about the
estimates being made in order to determine the fair value. There could have been further
explanation about the estimates that were made. Also, it's stated below the table that “volatility
has been estimated based on actual trading statistics”3. In order to explain this note better, Rogers
could have included a line graph or chart, which showed the level of volatility associated with
the Class B Voting shares. Consequently, the relevance and materiality of this note disclosure
would have increased significantly. However, the table is set out clearly and there are two years
included (2021 and 2022), which makes the numbers in the table comparable. For example, we
can conclude from the table that the volatility of Class B shares remained the same from 2021 to
2022. If there were three years included (2020, 2021 and 2022) instead of two years, users could
have gained some perspective about the impact that COVID had on the weighted average fair
value of the options.
Above that, in the stock based compensation expense section, the total liability as at December
31st, 2022 is stated and subsequently the classification approach of this liability is explained.
1
Rogers Communications Inc. (2022). Note 13, 23 and 25. Consolidated Statements of Income . Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/Question%201%20(Notes%2013,%2023%20and%2025).pdf
2
3
This helps users understand how the stock based compensation liabilities would appear on the
balance sheet as either “accounts payable and accrued liabilities”4 or “other long term
liabilities”5. This linkage between the compensation expense and balance sheet increases
transparency and gives users clarity about how the change in compensation would impact the
balance sheet. Also, once again, the display of data for two years assists users in comparing the
change in total stock based compensation expense from 2021 to 2022. To add on, it is mentioned
that Rogers “paid $72 million to holders of stock options, RSUs and DSUs using the cash
settlement feature”6. This adds to the transparency of the note disclosure because users are able
to understand the expenses associated with exercising the cash settlement feature (SARs).
Furthermore, the table outlining the range of exercise prices provides greater detail about the
number of options outstanding for each range. This helps users understand the breakdown of the
options outstanding and hence is material for users such as investors who may be interested in
evaluating the monetary or intrinsic value of the options. The remaining contractual life of the
outstanding options are also included in the table in order to highlight the durability of the
options, which not only increases transparency but also increases the relevance to potential
investors interested in Rogers. The unrecognized stock option compensation expense is also
disclosed, taking future services that have not been accounted for into consideration. Hence,
users are informed about upcoming changes to the net income in the next 4 years. Overall, these
disclosures in the stock options section increase transparency, relevance and the materiality of
the note.
In addition, there is a description provided about equity derivatives, however, it lacks substantial
information considering its an uncommon practice. In order for users to understand better, there
could have been more information provided about the advantages of using equity derivatives. For
example, “equity compensation hedging allows for corporates to fix their equity compensation
costs, which generally have far more upside than downside”7. The provision of the information
as aforementioned would have instilled greater confidence in investors about Roger’s stock
based compensation expense and hence could have been material to users.
In conclusion, Note 25 of the Rogers’ note disclosure has a sufficient level of understandability,
relevance, materiality, transparency and comparability. There could have been some
4
5
6
7
-, M. (2018, September 25). Equity compensation hedging. Sell Side Handbook. Retrieved April 10, 2023, from
http://sellsidehandbook.com/2016/09/24/equity-compensation-hedging/
improvements made especially in terms of understandability. The disclosure could have been
more simplified and presented in an understandable fashion without the use of complex
terminology.
Question 2
a)
The quality of the CEO letter from the Rogers Communications Inc. 2022 annual report will be
analyzed using the criteria briefly outlined by the document named “Teaching Note: Some
Approaches To Analyzing A CEO Letter Published In A Corporate Annual Report”8. In
accordance to the document, the following aspects of the CEO letter will be evaluated:
- Understandability of the letter

- Usage of exaggeration and hyperboles
- Cross references to the MD&A, CD&A and new releases
- General structural features of the letter such as the number of words (lengthiness) and
photos/graphics
- Contextual presentation (the economic environment in which the CEO letter was written)
- Description of the financial indicators being considered
- Hubristic language
The evaluation of the aspects as aforementioned would give a holistic perspective on the quality
of Rogers’ CEO letter. Firstly, the CEO letter uses plain language, which is not only
understandable to the top management but also to relevant stakeholders such as investors,
suppliers, employees, creditors, regulators, market analysts and more. For example, there is a
comparison made between the Rogers’ shareholder return, stock indices (Dow Jones, TSX
Composite Index) and their two national competitors. These comparisons make it easier for
users, especially investors interested in shareholder return, to understand how Rogers performed
in comparison to their major competitors and the stock indices. Also, the CEO letter is broken
down into 5 sections (regaining momentum, disciplined execution, robust outlook, one national
company and clear vision for the future), which makes the letter easy to follow and understand.
The “disciplined execution” section complements the level of transparency in the letter by
outlining all three sources of revenue including wireless, media and cable.
In addition, the CEO letter does not consist of hubristic language or any sort of phrases that may
be exaggerated/hyperbolic. The CEO successfully conveys his outlook and vision in a balanced
8
Tassone, R. (2023). SOME APPROACHES TO ANALYZING A CEO LETTER. TEACHING NOTE: SOME APPROACHES TO
ANALYZING A CEO LETTER PUBLISHED IN A CORPORATE ANNUAL REPORT. Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/SOME%20APPROACHES%20TO%20ANALYZING%20A%20CEO%20LETTER%20V4%20(4).p
df
and modest manner. This is exemplified at the beginning of the letter when the CEO mentions
that “2022 was a transformative year”9 and the fact that “performance had lagged our peers and
we had lost our leadership footing”10. Consequently, we can infer from these phrases that the
CEO gives an honest and balanced viewpoint about the company’s performance for the year.
Based on the downsides, the CEO thanks the entire team at the end of the CEO letter, which
symbolizes the CEO’s humble nature and thankfulness for everyone’s contributions including
customers and shareholders as mentioned in the letter. On the other hand, the CEO letter fails to
connect with the readers on a personal letter unlike the CEO letter for Berkshire’s performance
written by Warren Buffet, which has a more conversational and informal tone. Thus, it is hard to
determine whether the CEO letter for Rogers was written by the CEO himself or the PR team
and then signed off by Tony.
Although there are no direct cross references with the MD&A, CD&A or news releases, in the
“one national company”11 section of the CEO letter there is mention about the merger between
Shaw and Rogers. This gives users an insight to the CEO’s opinion on the merger and also settles
any rumors spread by press articles surrounding the merger. Hence, users are indirectly able to
connect with the CEO regarding the topic of the merger. Also, there is further information given
about the different streams of service revenue (wireless, cable and media). For example, the CEO
letter states that “in wireless, we grew service revenue by 7%”12 and the MD&A for 2022
mentions the same with further details about why the service revenue increased- “as a result of
higher roaming revenue associated with significantly increased travel”13. Therefore, it can be
derived that the CEO letter concisely discloses its major highlights and financial performance for
the year through some indirect cross references with the 2022 MD&A and press articles.
However, there could have been further cross references made to important points from the
MD&A in order for a better linkage between both the CEO letter and MD&A.
Furthermore, the general structural features of the CEO letter helps users understand the CEO’s
attitude and approach towards the company and its respective employees. There are two
photographs included in the CEO letter, which are taken in a retail outlet of Rogers. One of the
photos shows the CEO politely interacting with his retail employee. This manifests the CEO’s
9
Rogers Communications Inc. (2022). Regaining Momentum Rogers 2022 Annual Report . Rogers 2022 Annual Report. Retrieved
April 10, 2023, from file:///Users/dheemans./Downloads/Rogers-2022-Annual-Report-1.pdf
10
11
12
13
respectful and approachable nature towards his employees. He seems to be open-minded and
receptive to everyone's opinion in the company in the photos regardless of their position level in
the company. To add on, the CEO letter is extremely concise and straightforward as it is bounded
to only 2 pages, which eliminates any unnecessary lengthiness. There are also two quotes made
by the CEO, which are issued in large red font color in the letter. These two quotes highlight the
CEO’s vision and plan for the future briefly, which enhances the quality of the letter as readers
gain perspective about the company’s goals in short. It can also be noted that there is a constant
use of possessive plural pronouns such as “ours” and “we”, which manifests that the CEO
promotes inclusivity of all employees in the company.
In terms of contextual presentation, as aforementioned the CEO letter begins with an honest
representation of Roger’s 2022 performance in the year by highlighting their shortcomings in
financial success in comparison to Rogers’ peers. There is also mention about the general context
in which the CEO letter was written- “despite significant volatility, we met our upgraded
guidance for the year”14. This describes the macroeconomic environment in which Rogers
achieved their high growth rate. He finds the company as a whole accountable for the positives
and negatives associated with Rogers. That being the case, we can assume that the CEO takes
responsibility for the outcomes of the company and also refers to his employees throughout.
There are also specific financial indicators taken into consideration in the CEO letter including
the adjusted EBITDA, the level of capital and shareholder return. There is also mention about the
amount of dividends paid out in total to shareholders. This especially helps valuators and
investors gauge the profitability of Rogers for the 2022 financial year. Consequently, it can be
reasoned that the CEO focuses on providing performance measures relevant particularly to
investors that may be interested in the growth in returns associated with the company. Other
simple financial indicators such as the price to earnings ratio (P/E ratio) could have been
included in the CEO letter in order for potential investors to better understand the financial
performance of Rogers.
In conclusion, the 2022 CEO letter from Rogers Communications Inc. is well-written and
informative to its users. As examined throughout, all aspects of the CEO letter were evaluated
and it can be concluded that the letter exceeded expectations for most of the aspects highlighted
in the Teaching Note Document. Overall, there was room for improvement in the description of
financial indicators and cross references with the MD&A.
14
b)
The CEO letter provides helpful insight to the inner workings of a company and can be useful to
understanding the financial reporting of that organization. Firstly, the CEO letter gives valuable
information about the culture within an organization and the “tone at the top”. For example, if a
CEO letter consists of hubristic language, it can indicate to users that the top management is
overconfident about their performance and fails to explore the negative outcomes. Hence, an
organization exemplifying such arrogant behavior in the top management can be prone to
fraudulent behavior on the financial statements through numbers on financial statements being
overstated. Enron’s CEO letter released in 2000 is an example of a hubristic CEO letter, which
focuses on only the positives of the company. The CEO letter begins with “Enron’s performance
in 2000 was a success by any measure, as we continued to outdistance the competition”15. There
is also usage of exaggerated phrases throughout the CEO letter though terms such as “enormous
increase of 59%”16 and “highest level ever”17. These statements were clearly not accurate and a
misrepresentation of the company’s performance as Enron ceased their operation later in 2007
due to poor accounting practices. Thus, a CEO letter can be helpful to understanding the
financial reporting of an organization as referred to in the “Tone At The Top Article” document-
“the tone set by the top management is the most important factor contributing to the integrity of
the financial reporting process”18.
To add on, as quoted in the “Tone At The Top Article” document, “fraudulent reporting usually
occurs as the result of certain environmental, institutional or individual forces”19. Hence, a CEO
letter’s contextual exploration can help users understand the macroeconomic environment in
which the letter was written. This can subsequently assist users in gauging whether an
organization or a particular industry would be vulnerable to fraudulent reporting behavior. Here,
the CEO can enhance the quality of his writing in the letter by evaluating both the successes and
failures of the company. An honest representation of the company’s performance for the year can
be indicative of not only the CEO’s attitude but also about the financial stability of the company.
15
ENRON. (2000). ENRON CEO LETTER . ENRON CEO LETTER 2000. Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/Enron%202000%20CEO%20LETTER%20(1).pdf
16
17
18
The Metropolitan Corporate Counsel. (2007, June). TONE AT THE TOP- PART 1. Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/TONE%20AT%20THE%20TOP%20ARTICLE%20(1).pdf
19
Furthermore, the visions and goals of the CEO as highlighted in a CEO letter can help users
understand the financial reporting of that organization better. For example, users can read
between the lines and note mentions of any unrealistic goals for the year that can potentially put
pressure on accountants and employees to inflate the earnings of a company in order to attract
more investors. This can especially be useful if the CEO clearly focuses on achieving short-term
results rather than the long-term results in the letter. A focus on short-term results can lead to
“the desire to obtain a higher price from a stock”20, “unrealistic budget pressures”21, “financial
pressure from bonus plans”22 and more. Consequently, an organization with a clear focus on
short-term results in the CEO letter can be susceptible to fraudulent accounting behavior. In
contrast, if a company chooses to focus more on long term goals there is a lower possibility of
inappropriate accounting practices being conducted.
Moreover, a company’s recent activities highlighted in the CEO letter can be used in
understanding whether there may be complex transactions involved or existence of weak internal
controls. For example, mergers and acquisitions of new divisions can lead to more complex or
unusual transactions, which in return can increase the risk of material misstatement on financial
reports. This can misrepresent a company’s financial performance and may give investors an
unclear perspective.
In conclusion, a CEO letter can be helpful in determining how vulnerable a company or

organization is to fraudulent financial reporting behavior. Also, it outlines the culture within a
company, which can have implications on the accounting numbers reported.
Question 3
The quality of Rogers Communications 2021 ESG report will be assessed using the criteria
provided by the GRI Framework. The following aspects of the ESG reports will be evaluated:
- Completeness and materiality

- Balance and clarity
- Stakeholder inclusiveness
- Sustainability context
- Usefulness (clarity, reliability, accuracy, timeliness and comparability)
- High priority focus areas
20
21
22
- Scope and Strategy
Firstly, the 2021 ESG report highlights the impact of all three dimensions including environment,
social and governance. There are different pillars assigned to each dimension of ESG as outlined
in the “Our ESG Approach” section, for example, customer excellence and people and culture
are part of the social dimension. These pillars subsequently show the various intended outcomes
and impacts to users. There is also a performance highlights section, which gives material
information about the significant impacts that the ESG pillars had. For example, Rogers
performed well in terms of customer excellence as they were “Awarded Best In Test and
recognized as Canada’s most reliable 4G and 5G network”23. This can be noted as material
information to users who may be interested in investing into Rogers. Although the table only
provides a brief overview of the pillars, there is further exploration about each of the ESG pillars
later in the report which increases the level of completeness in the report.
Moreover, stakeholder inclusiveness is taken into consideration when exploring the safety and
well being, employee engagement, community empowerment, community engagement and
impacts on indigenous peoples. An example would be in the community empowerment section
where there is mention about empowering community and engagement with indigenous peoples
-“investing in programs that help youth develop life skills and confidence”24 and the “Great Bear
Initiative partnership”25. This section demonstrates how Rogers managed to respond to the needs
of minority groups and communities in need of help through connecting vulnerable communities,
charities and donations and partnership agreements. Therefore, it can be noted that Rogers
considers even the smallest stakeholders associated with the company, which not only enhances
inclusivity but also provides users with the strategic approach taken in order to achieve this.
In the Environmental Stewardship section of the report, there is focus on high priority areas
such as minimizing waste, energy efficiency and greenhouse gas emissions. These focus areas
are complemented by key performance measures in order for users to understand how well
Rogers tackled environmental goals. For example, there is a table which outlines the
performance trends for greenhouse gas emissions from business activities. This table exemplifies
how emissions from business activities have decreased over the years (2017-2021). The decrease
in emissions is given greater clarity by explanation of various strategies implemented by Rogers
such as “exploring renewable energy sources, optimizing the fleet replacement and management
23
Rogers Communications Inc. (2021). Connecting Canadians- 2021 Environmental, Social and Governance Report. ESG Report.
Retrieved April 10, 2023, from file:///Users/dheemans./Downloads/ESG_Report_2021%20(3).pdf
24
25
program, upgrading and retrofitting buildings”26. Also, waste management is measured through
evaluation of the level of waste recycling over the past 4 years (2017-2021). This gives
sustainability context as Rogers sets out the impact that these strategies had on a wider context
of sustainability. The reduction of waste and emissions was presented with greater context, for
example, the reduction of greenhouse emission aligned with the Paris Agreement and the waste
management approaches optimized material use and diverted waste from landfills.
On the other hand, the Rogers ESG report just like any other sustainability report lacks
comparability. This is because all companies tackle sustainability in their distinct ways and
sustainability goals differ between industries. Although most industries focus on reducing
greenhouse gas emission, it is important to note that the approaches to sustainability are often
distinct. For example, Teck’s 2021 sustainability report has a section which emphasizes on
Tailing Management, however, Rogers does not explore this topic due to the fact that “tailings
are a common byproduct of the mining process”27. We can see here that companies selectively
choose their sustainability approaches in accordance to their distinct industry and focus areas.
Hence, the lack of comparability does not necessarily impact the quality of Roger’s ESG report.
Above that, there is a balanced focus on all dimensions of ESG, whether it be the environment,
governance or social. All sections deliver information about the various impacts each strategy
has had on the wider context. Also, towards the end of each section, there are common questions
regarding the dimension, which aim to enhance transparency and increase clarity for the users.
The “Being Transparent On Our Climate Disclosure” section consists of 5 questions that give
brief responses about material issues with regards to the environment. Besides that, most of the
data provided in the sustainability report is complemented by visualizations such as bar graphs
and pie charts, which adds to the aesthetic feature of the report and amplifies the usefulness of
the report. Also, the slides based style approach of the sustainability report makes the report less
lengthy and more interesting to read.
In addition, the shared value creation section not only increases the level of stakeholder
inclusiveness but also states all strategies taken to increase sustainability especially in the social
dimension of ESG. These initiatives demonstrate Rogers’ attempt to “connect business strategies
and corporate objectives to sustainability”28. There is mention about the role of Rogers, the
impact and key initiatives taken in order to achieve those goals. This helps users gain clarity
about the impact that each of the initiatives had within Canada- e.g. “87% of our workforce feels
26
27
Teck Resources. (2021). Teck- Purpose Driven. Teck ESG Report. Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/2021%20Teck%20Resources%20Limited%20Sustainability-Report%20(1).pdf
28
CPA Canada. (2013). A Starter’s Guide to Sustainability Reporting. Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/A%20Starters%20Guide%20to%20Sustainability%20Reporting%20(2).pdf
included and can be themselves at work”29. The numbers attached to each of the impacts increase
the reliability of the statements being made. However, it is important to note that sustainability
reports are not audited and thus the number and data provided in the report may not be fully
accurate or reliable.
Although the sustainability report explores all dimensions of sustainability in-depth as

aforementioned, there could have been details provided beyond the GRI framework in order to
increase the credibility of the report. For example, as stated in CPA’s Starters Guide To
Sustainability Reporting, there can be use of Global Initiatives and standards to support a
respective company’s sustainability approaches such as the Carbon Disclosure Project (CDP) and
International Integrated Reporting Council (IIRC). These initiatives were not covered or
mentioned in the report and thus this may have impacted the reliability and materiality of the
report in a negative manner. Nevertheless, Rogers dedicates a section of the report to “Awards
and Recognitions”30 they have received, which in turn aims to increase the reliability and
credibility of the report.
Lastly, there is sustainability context provided in the “Commitment To International Sustainable

Development Standards”31 section. This section considers the impact of eliminating corruption,
human rights movements and labor standards on the larger context. For example, Rogers states in
this section that they “defend the elimination of discrimination in respect of employment and
occupation and of forced labor”32. This exemplifies Rogers’ commitment to aligning practices
with the United Nations Global Compact (UNGC) and hence sets a larger context to their goals.
In conclusion, Rogers’ ESG report successfully satisfies the GRI framework and provides
users/stakeholders with a profound analysis of all the dimensions of ESG. Overall, the reliability
of the report could have been improved by greater focus on providing information beyond the
GRI framework and audit of all the numbers/data stated in the report.
29
30
31
32
REFERENCES
Rogers Communications Inc. (2022). Note 13, 23 and 25. Consolidated Statements of Income . Retrieved
April 10, 2023, from
-, M. (2018, September 25). Equity compensation hedging. Sell Side Handbook. Retrieved April 10, 2023,
from http://sellsidehandbook.com/2016/09/24/equity-compensation-hedging/
Tassone, R. (2023). SOME APPROACHES TO ANALYZING A CEO LETTER. TEACHING NOTE:

SOME APPROACHES TO ANALYZING A CEO LETTER PUBLISHED IN A CORPORATE ANNUAL
REPORT. Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/SOME%20APPROACHES%20TO%20ANALYZING%20A%20CEO%
20LETTER%20V4%20(4).pdf
Rogers Communications Inc. (2022). Regaining Momentum Rogers 2022 Annual Report . Rogers 2022
Annual Report. Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/Rogers-2022-Annual-Report-1.pdf
The Metropolitan Corporate Counsel. (2007, June). TONE AT THE TOP- PART 1. Retrieved April 10,
2023, from file:///Users/dheemans./Downloads/TONE%20AT%20THE%20TOP%20ARTICLE%20(1).pdf
Rogers Communications Inc. (2021). Connecting Canadians- 2021 Environmental, Social and
Governance Report. ESG Report. Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/ESG_Report_2021%20(3).pdf
Teck Resources. (2021). Teck- Purpose Driven. Teck ESG Report. Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/2021%20Teck%20Resources%20Limited%20Sustainability-Report%2
0(1).pdf
CPA Canada. (2013). A Starter’s Guide to Sustainability Reporting. Retrieved April 10, 2023, from
file:///Users/dheemans./Downloads/A%20Starters%20Guide%20to%20Sustainability%20Reporting%20(
2).pdf

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Dheeman Shahri 1006803979

- Understandability of the letter

In conclusion, a CEO letter can be helpful in determining how vulnerable a company or

- Completeness and materiality

- Scope and Strategy

Although the sustainability report explores all dimensions of sustainability in-depth as

Lastly, there is sustainability context provided in the “Commitment To International Sustainable

Tassone, R. (2023). SOME APPROACHES TO ANALYZING A CEO LETTER. TEACHING NOTE:

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