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Blake and David examine the latest tax legislation traveling through Congress, including a new bill requiring the IRS to provide detailed explanations for math errors on tax returns. They also discuss the IRS's new direct file program, the banning of non-compete agreements, and the coolest profession around (spoiler alert: it's not accounting). Lastly, they touch on the concerning data breach at BerryDunn and the AICPA's efforts to rebrand the CPA to attract more young people to the field.
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Chapters
- (02:40) - New proposed IRS Math Act
- (05:42) - IRS wraps first season with free file program
- (09:44) - "The Magician" tax preparer arrested for $100 million tax fraud
- (15:11) - The future of social security
- (19:01) - Sam Bankman-Fried makes a deal in civil suit
- (20:34) - FTC rules noncompetes are unlawful
- (25:32) - Ryan Tax Firm challenges FTC noncompete ruling
- (28:04) - QuickBooks Live announcement upsets accountants
- (41:10) - Anonymous listener says you can work normal hours and still make money
- (44:31) - Accountant charged with embezzling $800k from CA paving firm
- (47:39) - Ryanair CEO thinks more accountants should be running airlines
- (55:25) - Accounting firm sued for data leak
- (57:22) - CPA "Coolest Profession Around)
- (01:01:35) - What is "Accounting Plus"
- (01:06:38) - NASBA offers The Accountancy Licensing Library
- (01:10:00) - Thanks for listening and remember to subscribe
Show Notes
Accountant Charged With Embezzling $800,000 From Paving Firm in California - CPA Practice Advisor
Ryan Leads Charge Against Biden’s Ban on Noncompete Clauses - CPA Practice Advisor
Move Over, TurboTax? IRS Considers Expanding Free Tax-Filing Program – WSJ
Boeing Needs Another Accountant As CEO, Says Ryanair CEO – Avweb
Ultra-Rich Should Pay More Taxes to Save Social Security, Poll Shows - CPA Practice Advisor
FTC Bans Noncompete Agreements That Restrict Job Switching – WSJ
Bronx tax preparer known as "the magician" arrested for $100 million tax fraud | ADN América
With close calls mounting, the FAA will require more rest for air traffic controllers
New bill would force IRS to explain tax return errors | The Hill
The Accountancy Licensing Library: Your Ultimate Resource for CPA Licensure | NASBA
The cost of doing your taxes are up nearly 10% this year – Marketplace
Sam Bankman-Fried agrees to help FTX investors in lawsuits against Tom Brady, Larry David
Intuit Hosting 'QuickBooks Live' Webinar
QuickBooks "Live Experts" May Not Be So Bad
Millions more salaried workers will be eligible for overtime pay under final Biden administration rule
Senators introduce bill to simplify IRS notices
IRS Says It Saw ‘Strong Response’ From Direct File Pilot Users This Tax Season
U.S. accounting firm BerryDunn says third party breach impacted over 1.1 million customers
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Transcripts
The full transcript for this episode is available by clicking on the Transcript tab at the top of this page
Creators & Guests
What is The Accounting Podcast?
The Accounting Podcast (formerly the Cloud Accounting Podcast) is the world's #1 accounting, bookkeeping, and tax podcast! Join us weekly for a roundup of accounting news, analysis, and interviews. Plus, earn free NASBA-approved CPE credits for listening with the Earmark app. Learn more at https://earmarkcpe.com.
Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!
Blake Oliver: [00:00:04] Coolest profession around, David. I, uh, I think that's the most cringeworthy thing I've heard this year. We're going to change. We're going to change the CPA from being certified public accountant to coolest profession around.
David Leary: [00:00:25] Coming to you weekly from the OnPay Recording Studio.
Blake Oliver: [00:00:29] Hey everyone, and welcome back to the show. I'm Blake Oliver.
David Leary: [00:00:33] And I'm David Leary. And welcome everybody post tax season. And it's great Blake we've met what 70 accountants or so. So this last week that went up to Scottsdale. Yes right there was that event. And then our podcast data proves accountants are on vacation.
Blake Oliver: [00:00:50] Our podcast proves that accountants are on vacation.
David Leary: [00:00:52] How so? So we have you know, we're number one in the world and we're I think in now 50 or 60 countries we chart. But all the vacation spots, we've totally charted. So Fiji, Bahamas, Barbados, Bermuda, we're like number one, number two, number five. Like because all the accountants are now in vacation spots listening to our podcast.
Blake Oliver: [00:01:15] Because there's like five accountants in Barbados listening to the accounting podcast while they're on vacation. Well thank you, thank you. If you are on Island time and listening to us, we appreciate that. Like David said, uh, we were here in Scottsdale where I was here in Scottsdale. David came up from Tucson for, uh, Michael Lee's a little private secret semisecret, uh, accounting gathering in Scottsdale. It's like a it's a conference. That's not a conference. There's no, like, formal agenda. There's no website. You have to know somebody. Do not ask me for an invite. I don't control those invites. But, uh.
David Leary: [00:01:54] What was impressive is people were not. I saw one person do a half hour meeting that they missed scheduled, but other than that, people were not working, genuinely not working. They were taking three, 4 or 5 days off.
Blake Oliver: [00:02:05] And that's why we were not streaming at the end of last week. And we are doing so on Monday morning. So, uh, hope you got your coffee. I got mine here. Let's dig into the news. So the story that is our headline for this episode is that there is an actual tax bill in Congress. That makes sense. A new bipartisan bill aims to enhance transparency by requiring the IRS to provide detailed explanations of errors on tax returns, specifically outlining the nature of the error and the corrected tax amount due. David, have you ever received one of these notices from the IRS where they tell you that there was a mistake on your return? They've corrected the mistake, and now here's what you owe.
David Leary: [00:02:48] I feel like I've had that, but I think it was negligible because they can do this. They can change the math or they can change it. Clerical error. Yeah. To to expedite processes. Right. Because they don't want to tie your return up for months. They'll just fix it really quick right.
Blake Oliver: [00:03:03] Yeah. And they do that. But they don't have to explain what they did. And it's been the same for me where it increases the amount I owe by like 50 bucks. And they say send a check. And I'm like, all right, well I could forward this to my CPA, my tax guy. But I know better than that. It's not worth it. It's not worth his time. It's not worth mine. I just send the money in. Right. Well, this new legislation would stop the IRS from doing that. It's called the IRS Math and Taxpayer Help Act of 2024. And it's sponsored by your favorite senator, David senators, uh, Senator Elizabeth Warren, along with Bill Cassidy. Uh, and there are Representatives Randy Feenstra and Brad Schneider. This is bipartisan. Um, the IRS issued over 9 million math error notices during the 2022 tax filing season. And now they have to explain why they did what they did. So.
David Leary: [00:03:57] And you missed the title of this the the Kishi. It's called the IRS Math Act. It's very, very, very tricky. Uh, chichi, uh, name for that. And I think that the gist of it right is they're gonna it's.
Blake Oliver: [00:04:09] What was that word you just said? Did you say Chichi chichi.
David Leary: [00:04:12] Chiki chiki maybe I said chichi. I'm like, hey, I'm just making up words here. Just pumping things out.
Blake Oliver: [00:04:18] Sorry. I had to make sure I was hearing properly.
David Leary: [00:04:19] Yeah, so. But they said there's three things it's doing right. One to make it easier to understand. Two include rectifying procedures because previously if you got one of these bleak, I think you had 60 days to protest it, if that's the right word. But there was no number to call. It wasn't very easy. So they wanted to send a letter.
Blake Oliver: [00:04:36] Or a fax.
David Leary: [00:04:37] And then apparently there's a possibly a third piece of this. They're working with the Taxpayer Advocate. Maybe these have to start going out via registered mail to ensure people actually got them. I don't I don't know if that's all the cases or if it's a major dollar figure, but got it.
Blake Oliver: [00:04:52] Well, we've got more news from the IRS. The IRS wrapped up the first season of its new free file program. Well, they don't call it free file. They call it direct file. Direct file. This is the IRS's own tax software. They say that they processed over 140,000 returns, which surpassed their goal of 100,000. It was available to taxpayers in 12 states with relatively simple returns. And now the IRS, given the success of year one, is considering expanding the program to include more states and more complex tax returns. But of course, that is politically controversial. It faces opposition from Republicans in Congress and the tax preparation industry, who argue that the program is unnecessary and duplicates existing free tax preparation services. Now, how much did it cost? That's always the question we want to know the answer to. The Treasury Department spent 24.6 million on the direct file program includes. That includes 10.5 million on building the system and 2.4 million on operating it. And they estimate that taxpayers saved 5.6 million in fees through the program. So actually, a pretty modest program, if you think about it, uh, a few tens of millions of dollars to build their own software. Not bad.
David Leary: [00:06:10] So, yeah. So direct operational cost is $17 a return. The cost to us is taxpayers, right? We're we're footing the bill for this now. Right. Um, the thing that I thought was interesting was the quote in one of the articles I saw from, uh, Danny Wuerffel, the, uh, IRS commissioner. And I'll make you read the whole quote. I'll read the first half of the quote. Direct file provided important lessons for us. A team of experts from across government work together alongside private sector partners with critical expertise to build and test the direct file. Private sector partners. So this is what's happening in my brain. Okay, taxpayers, we're going to not let the private sector in the commercial free market do your taxes. Instead, we're going to decide where we spend people's tax dollars on by choosing partners. Right. This is like it's sure not capitalism. Blake. Right.
Blake Oliver: [00:07:06] When was government spending ever capitalism? Yeah. Uh, the cost of doing your taxes. You mentioned that per return, it was $17 for this direct file program, which actually seems like a pretty great deal. Uh, you know, I mean, I'm we're paying for that as taxpayers, and we don't have the benefit, David, of using a free tax preparation system. I mean, what's the cheapest you get your tax return done for if you use one of these paid providers free, free.
David Leary: [00:07:33] Free like.
Blake Oliver: [00:07:35] Then you got to pay the state, right. So it ends up being like 50 bucks. 40 bucks or what, 4050 bucks. Yeah. So that's actually pretty good. They're keeping it, you know, significantly below the market rate for that type of return. Um, I saw a story in marketplace about how the cost of doing your taxes is up 10%, about 10% this year, uh, according to the previous year, as per the consumer price index, which actually seems like overall pretty reasonable given inflation, right? Inflation at what, five, 6% annually? Uh, over the last few years. I mean, some the prices of some things have risen 50%. And yet tax preparation is only up 10%. And that includes both the software filing options and the human options, you know, getting a CPA. So actually, we've got a long way to go as a profession in terms of getting paid what we're worth.
David Leary: [00:08:28] Which I guess, I mean, I couldn't find it anywhere. But we can just speculate. Who do you think these private sector partners are, right?
Blake Oliver: [00:08:35] Well, when they say private sector partners, they're talking about like consultants that come in and build the software, right? I assume the IRS has.
David Leary: [00:08:40] Their own right. So I'm thinking it's probably Big Four consultants. It's probably Oracle. Right. So it's like they're they're stealing money from the free market and competitors and just picking and choosing who now gets this money. Um, I don't know.
Blake Oliver: [00:08:55] Well talk about stealing money. You know who stole a lot of money? It's somebody that we know. David. Uh, I don't think I have ever been personally connected to a massive fraudster before, but now it's happened. I spotted this story in Addy and America.com, Bronx tax preparer known as the magician, arrested for 100 million tax fraud. And I look at the name Rafael Alvarez and I think, wait, I know this guy. I know Rafael Alvarez. He's the founder of Attacks attacks, a firm that operates across New York. And he has been accused. Of defrauding the US government for over $100 million. The US Attorney's Office for the Southern District of New York accuses Alvarez of creating a large scale scheme, where he filed tens of thousands of individual tax returns with false information. This was done to reduce his client's tax burden and generate significant profits for private companies. So this happened between 2010 and 20 2010 year period. Attacks. As Bronx County office reportedly prepared around 90,000 tax returns, all containing fraudulent information, false deductions, fabricated capital losses, false business expenses, fraudulent tax credits. They're also accused of lying to an IRS agent, the firm and Alvarez and an employee of the firm. And it's just it's massive. It's one of the largest. I think it might be the largest tax fraud case ever. In terms of the amount.
David Leary: [00:10:31] I feel like in the past I remember about individual locations being accused of some tax fraud. It feels like they've rolled this up into a bigger case of them being directed at a at the highest levels of management.
Blake Oliver: [00:10:45] Yeah, it was it was across multiple locations that this happened. So At-X is a franchise and I'm not sure if this was across I it can't possibly I don't think it could have possibly been across all the franchisees. Right. Because that would be a really hard scheme to maintain. Maybe it was just the corporate owned offices that, like Alvarez originally established, but you got to feel for the franchisees if they're innocent and they haven't been doing anything. Now, their firm name, the name of this franchise is tarnished by this ruling. Or maybe it'll drive business. I don't know, maybe people just want, like, the most fraudulent tax preparer they can find. But that's crazy, right? 90,000 returns over ten years. So, you know, almost let's just say close to 10,000 returns a year. Right. Round up. Yeah. Um, all fraudulent $100 million. And, uh, it's not in the article that I'm looking at right now, but it looked like he in like a space of four years, made like $15 million doing it. So I mentioned, I know this guy. That's the crazy thing is, is Rafael Alvarez was on the Zero Partner Advisory Council. So he was showing up at Xerocon and all these events, and he was advising, and they did a partnership with attacks to provide bookkeeping software for their clients. So I've shaken hands now with a massive fraudster. And you know what's interesting thinking about it is that he struck me as a really, really charismatic guy. And this has happened to me more than once now, where I've met some really charismatic people and they've all turned out to be fakes.
David Leary: [00:12:26] Thank you. What's that? Over the top?
Blake Oliver: [00:12:28] Yes, exactly. Like there seems something. He just seemed kind of like. Not like. Like unreal in a way. Right. And it turned out to be the case. Now, I don't know if that's always the situation with these people, but I'm starting to suspect it. Like I got, like, in retrospect, it doesn't surprise me that it turned out this way.
David Leary: [00:12:47] I mean, a lot of the episodes of the Oh My Fraud podcast, they always in the beginning, they start describing the perpetrator. And it usually starts out of like this outgoing, like confident, overly rambunctious personality. So there's you're probably right, there is a trend here of that type of personality.
Blake Oliver: [00:13:05] It's amazing. I've got one more tax story before we move on. Okay? So as tends to happen in cycles, the conversation in our country shifts to the solvency of Social Security and whether or not there will actually be any Social Security payments for you and for me, David, and for our children. Right. Because as the population gets older and as the baby boomers, you know, age into collecting their Social security, there aren't enough people working to pay the Social Security payroll taxes to fund the current set of retirees. And the Congressional Budget Office estimates. Now, they do this every now and then, that Social Security recipients will only receive about 75% of their promised payments starting in 2034. Because the program is, you know, not going to generate enough money in order to fund.
David Leary: [00:13:58] About when I might if I take an early draw, that's about the year I would do it.
Blake Oliver: [00:14:01] Right. So the question is, I mean, I just assume this is going to happen. Like the only way to make Social Security solvent is you either reduce benefits or you increase taxes. Now with the with the baby boomers aging. And Jenks not far behind him. Who do you think is going to. What do you think they're going to vote for? Right? Retired people vote. What are they going to vote for? To reduce their benefits or to increase taxes on the people working increased taxes? Right. And already polls are showing that there is big support among registered voters in swing states to increase taxes. They would support a billionaires tax to address Social Security shortfalls. So I think what's going to happen is and this number is big, right? It's 77% of registered voters in seven key swing states. That's according to a Bloomberg News poll. They support raising taxes on billionaires in order to fund it. It's not actually really just billionaires. Of course. It never is, right. They're going to it. Over half support taxing wages beyond the first $168,600 for Social Security, which is probably the easiest thing to get passed. Right. It's like, why does why does it cap out right? So the people who make more than that, probably a lot of accounting firm partners are going to end up paying more in Social Security as a result because. What's going to happen, right? What do we what do we expect is going to happen? Taxes are going to go up to pay for these. So yeah. Uh, and then they reference President Joe Biden's proposed billionaires tax, which would impose a 25% levy on households worth more than $100 million. And that would be on accumulated wealth, which goes untaxed under current law. Right. You have to realize gains before you get taxed. But this would be like a wealth tax, minimum wealth tax kind of thing. Um, I wouldn't be surprised if at some point we did have a wealth tax of some kind because of this.
David Leary: [00:15:59] We'll see. The it just said, what if anybody's done the math on what if there was never a cap?
Blake Oliver: [00:16:06] If there had never been a.
David Leary: [00:16:06] Cap, never been a cap, would we be in a surplus? You know, I mean, I get the theory of the cap. The cap theory. Is this right? Basically, hey, if you make this much a year, you probably have extra money you're saving for your own retirement. You're not going to be a burden on the system in the future. So. So you get a you get a break. Yeah, you hit that cap. But in the grand scheme, to some extent, it's one of those everybody put in systems. And we're letting some people opt out at a certain level.
Blake Oliver: [00:16:33] Right, right above a certain income threshold, completely locked out. Well, and you know, the whole logic for the thing was like, you know, it's a forced savings, right? The money that you pay and Social Security right now is what's going to fund your retirement later. But that's not how it works. The money you put in now goes to fund current retirees. Duh. Right. That's how cash flows. So where do we go from here, David? I'll touch on tech stories.
David Leary: [00:16:57] I got on fraud quickly. So ft. It's a follow up story. Ft. Sam Bankman-Fried, he's, uh, swung a deal in a civil suit. So a bunch of investors are agreeing they've agreed to drop their civil claims if he testifies against the athletes and celebrities who pushed FTX. So you're talking Tom Brady, his former wife Giselle, Larry David, Steph Curry, Shaquille O'Neal and then other social media stars and influencers. It still needs approval from the judge. But I kind of feel like this is one of those like Sue everyone. Like if you slip at the mall and get hurt, your lawyer is going to sue every store in that mall. It doesn't matter where you slipped, right? It kind of feels like that. But at the same time, like, I suspect these celebrities were also victims because they bought into the whole story. Right?
Blake Oliver: [00:17:46] Like, just picture Larry David in court defending himself, right? He doesn't even know what crypto is. And he got paid to do one of those commercials. Well, at least in.
David Leary: [00:17:57] His commercial, you got to pretend you didn't know what crypto was, right?
Blake Oliver: [00:17:59] That was the yeah, that was the whole point, right? He that's great.
David Leary: [00:18:03] Yeah. I think honestly like the timing of this like the Tom Brady divorce. I think there was rumors that maybe he, they lost 35 to $50 million in crypto. I wonder how much of this impacted the divorce, because I can't imagine that is not an easy dinner table conversation to have with your significant other about how, you know, no matter how much money you make, 35, 40, 50 million is still a lot of money. Yeah, it is in a situation like this.
Blake Oliver: [00:18:30] Well. Let's talk about legislation since we were talking about taxes. Right. And we started out talking about a law. Did you see, um, and this isn't legislation. So that was a terrible transition. But did you see the FTC's ruling that, um, non-compete agreements are unlawful? They're banning non-competes that restrict job switching? Yeah. Big deal. Right. Uh, they issued a rule. They did it with a rule. It bans non-compete agreements which prevent employees from switching jobs, except for senior executives. And it's something like you got to make more than, uh, $150,000 a year. I think, to count. This is the first time in over 50 years that the FTC has mandated a change affecting the entire economy. And I'm curious to know what you think about this, David. Have you ever been restrained by a non-compete? Have you ever seen colleagues who had a non-compete get screwed over by it? I mean, like, let's look at this from both the employee and the employer perspective, assuming that, you know, this isn't challenged in court and ruled to be unconstitutional or whatever.
David Leary: [00:19:36] In the 90s, I had to sign a non-compete with Intuit. Everybody had to sign these. This was just common practice in the tech world. Everybody had signed Non-competes. But then I always understood that. In the state of Arizona. Even though you signed a non-compete, you're not going to have a judge or anybody tell you you can't work and do your livelihood. So they've always kind of been this thing you'd sign, but you could just blow off and ignore.
Blake Oliver: [00:20:03] Because of the state you live in. Some states.
David Leary: [00:20:07] Depending on where.
Blake Oliver: [00:20:08] Forced non-competes.
David Leary: [00:20:09] But even if you had to go fight that in California, even the judges there, they they were hardly enforced. And then California eventually just did away with them completely.
Blake Oliver: [00:20:20] But there are some states like. And I'd have to look it up. But, um, like I lived in Florida for a while and non-competes there. At the time, we're a real problem. If you were an employee, who'd sign one, because that non-compete could contain a geographic region and an industry and basically say that for two years after you stop working for this plumbing company, you cannot offer plumbing services within this geographic boundary. That sort of thing.
David Leary: [00:20:48] And I feel like I've heard accountants talk about this like, oh, I left this firm, I bought a firm, I acquired a firm because of that. Now I can't do this, but is this pretty common?
Blake Oliver: [00:20:59] Yeah. Well, if you do a deal, you must have a non-compete if you're buying a firm. Because what could happen is you buy the firm, which really just means you're buying the clients and the people right in the firm. Um, the person you're buying the firm from, they could just go out and start a new firm and start competing with you. If you don't have some sort of non-compete. The Non-solicit is obviously, I think, way more important, which is you can't solicit the clients that you sold to me, you can't go.
David Leary: [00:21:29] Steal them back.
Blake Oliver: [00:21:30] You can't steal them back. Right? That sort of thing, I think. And that's they're not saying you can't do that. So you can still have that. But like the the non-compete was designed to, you know, prevent you from, you know, if you have one as a firm is to prevent people from leaving and going out and competing with you. But it can be really bad for employees, too, because then they're, you know, they're stuck.
David Leary: [00:21:50] And it's it stifles innovation. Right? Because if I have this great idea, six months after I sold my firm to you, I can't go execute on it unless it's like it's a different oh, I'm going to build a restaurant now, then I'm okay. But if it's something in the space where my expertise are, I might not be able to pursue that amazing idea that could change the world.
Blake Oliver: [00:22:08] Yeah. And I think it really depends on your industry and the companies. You know, Sam. And the live stream says there's $1 billion logistics company that is notorious for enforcing non-competes. Other companies are afraid of hiring from there. It's really bad in logistics. Yeah. Um, thank you. Everyone who's joined us live on this Monday morning. Great to see you. Feel free to let us know what you think about the stories we're talking about. Anything else that's top of mind for you in the world of accounting. David, going back to our discussion of the IRS Direct File program, David said if it was $17 per return for 140,000 returns, you have to imagine that is going to scale pretty well. Incremental cost of each next return has to be way less than $17 per return. Very true.
David Leary: [00:22:51] Well that's 17 was just the operational cost. So that's running the servers, the service and support that was needed. And then the ID mechanisms, the login.
Blake Oliver: [00:23:02] Oh for the the third party ID id. Yeah. Yeah. Still will scale up and will be less per return I imagine. And then you got to think how much money are they saving on the other side. Not having to send math error notices. Right. Because yeah, the system is designed to produce the return correctly as opposed to some third party system which could get it wrong. Yeah. Which happens all the time. Right. So, um, what else is new? Oh, actually, I've got some more non-compete stuff. So guess what? Company was one of the first to file a lawsuit challenging the FTC's new rule banning Non-competes?
David Leary: [00:23:39] I well, I don't know the company, but I think the premise was that it was an overstep. But that's what the argument is, right? That this is not their jurisdiction for the SEC to make this call. But I don't know which company is.
Blake Oliver: [00:23:50] Ryan. Ryan.
David Leary: [00:23:53] Ryan.
Blake Oliver: [00:23:53] The Dallas based global tax services firm. It's a corporate model. Tax firm? Yeah. In Dallas, based in Dallas. Um, they filed a lawsuit, and the CEO, Brant Ryan, he criticized the FTC's decision as a severe overreach of government authority, asserting that non-compete clauses are essential for protecting intellectual property and the livelihoods of employees who contribute to it. Yes. And also preventing people at your firm from leaving and starting competing consultancy and tax practices. That too. Um, of course, the accounting.
David Leary: [00:24:31] Firm.
Blake Oliver: [00:24:32] Of course. Right. A professional services firm. But again, like there's exemptions for highly compensated folks. So I would hope that the partners at Ryan, for instance, are making more than $150,000 a year, in which case then it really doesn't affect them. All right. Where do we go from here? I've got some fraud stories. What? We talked about fraud already. The tax fraud. Last week.
David Leary: [00:24:56] Everybody was super fired up about the QuickBooks Live announcement. Did you want to chat about that?
Blake Oliver: [00:25:02] Quickbooks Live? Yes. So I didn't really pay too much attention. I did get the email forwarded by one of our listeners. Tell me what is going on. What announcement did Intuit make with QuickBooks?
David Leary: [00:25:12] So there's this Twitter post kind of summarizes people's feelings about it. It's the typical anytime Intuit moves the cheese an inch, people get very, very upset. So this is a tweet from Tyler S Clark at Dream Firms on Dream Firms on Twitter.
Blake Oliver: [00:25:28] At first I just got to stop you there. David moves the cheese an inch. Is that a real phrase?
David Leary: [00:25:34] That is a real phrase. I actually think it's even a book. Like, I think that's a book about how to deal with organizational change. Right? Or change. What does it mean to.
Blake Oliver: [00:25:43] Move the cheese?
David Leary: [00:25:44] Well, you're a mouse and you're trained to like, go to the cheese and then it gets moved. And then instead of finding maybe it's another part of the maze, instead of finding the cheese, you get all bent out of shape and you can't carry on with life because the cheese moved, right? So it is a phrase in a concept.
Blake Oliver: [00:25:59] All right. Go ahead. Sorry, I didn't mean to stop you. I just had to I had to understand that better.
David Leary: [00:26:03] So Tyler put out a tweet and it says, hey, tax Twitter. I'm officially done with Intuit after the latest stabbing in the back of accountants. And what a migrate my business to zero or FreshBooks. Pros cons estimated cost of migration question mark, question mark, question mark. If you say it depends, please tell me what it depends on. And then it's this huge thread. This is at 14,000 views. I of course responded on top of it of like every time Intuit moves the cheese. There's these threats for the last 20 years. Things never change. So but that's the people are very upset about this change. So let's get into the change.
Blake Oliver: [00:26:42] Yeah. What did they do that's.
David Leary: [00:26:43] So Intuit sent out an email, and I'll read the title of the link that you click through from the email. Basically, it's not really a blog post, but it's a post, right? It says Intuit QuickBooks live strategy evolving to benefit you and our shared customers. Essentially, it's two things that are happening. One is they're changing the name of QuickBooks Live assisted bookkeeping to QuickBooks Live Expert Assisted. And the focus is on more of a do it with me approach, right where there's like a small business coach on how to use QuickBooks properly. Yeah, you can, you.
Blake Oliver: [00:27:22] Can, you can video chat with somebody who can help you with your accounting and bookkeeping and not just.
David Leary: [00:27:28] The not your bookkeeping though. More of like the software per se, but they can.
Blake Oliver: [00:27:32] Help you like how to code a transaction, right? Like I understand that was the thing that technical support could never do before.
David Leary: [00:27:37] Yeah. And I'll get into that a little bit more here on that. Okay. And then the other half is this is now going to be exposed in Qbo and the navigation bar, even if you're connected to an accountant.
Blake Oliver: [00:27:49] Oh, that's why people are pissed.
David Leary: [00:27:50] That's why people are a little bit upset. So and I'll read a little bit from the Intuit official documentation. Then I'll soapbox a little bit on my side here. So quick. This is from the QuickBooks uh, post if you want to call it that. Quickbooks Live expert Assisted can free up your time by connecting a business to QuickBooks online certified experts using video, phone and screen sharing capabilities to help answer questions and educate customers about setting up, using, and managing their businesses on QuickBooks. And this is underlined the expert does not access or work in the business's books. They guide the customer on how to do the work. Topics covered included are how to categorize a transaction, access financial reports and dashboards, and reconciliation. Our assisted services do not include performing bookkeeping tasks such as providing advice, managing your editing, or making changes to transactions inside or outside of QuickBooks. Right. And then the rest of it's the typical like we'll partner with you talk, you know, and the thing. But obviously people are very upset by this. Why are they upset. So they're upset because this feels like Intuit again. It's trying to steal my clients or stealing my bookkeeping clients from me. They're going to write. That's a lot of why people are upset. I happen to see Jessica. Well, actually up at the little event up in Scottsdale. Jesse. Jesse McCracken. Jesse McCracken. I'm gonna take a sip of water one second.
Blake Oliver: [00:29:14] I'll help you out. Jessica McCracken was there from Intuit.
David Leary: [00:29:17] From the Intuit Accountants team. And so she spoke about this. And if you step back and really look at this, this to some extent is just QuickBooks tech support, but being kind of rebranded and repackaged at a 40 or $50 a month price tag. Right? Right. And from what I can tell, this new service and what they're doing is no different than when I did for QuickBooks Tech Support in 1997, minus the inventions of like, screen sharing and video calling and these technologies that are now around. But it was the same thing. We even charged people 169 bucks a year to get tech support for QuickBooks. And a lot of it was questions like, where should I post X? Where? Well, how do I print Y? Why is my 941 off by $0.43, right. And in many cases you could help them do these things, the small business owner. But sometimes you would just have to say, hey, that's something you need to ask your accountant. So we would help them create an account called Ask Your Accountant, and then we would have them post it to their. So we never did accounting service, but we did all the other questions they had that were how do I record a check? How do I do this? Like all of those types of things? And that sounds like the same service.
Blake Oliver: [00:30:31] It's not the same though, because what they're going to do that's different is they are going to help you with the accounting questions. That's the whole point. These experts are bookkeepers. They are accountants. So they can actually help you code the transaction.
David Leary: [00:30:44] Yes for like comment. Like we would do the same thing. Like it would be like get a mileage expense. Like we tell them kind of where to post things. But as soon as it was complicated, you really didn't do the accounting advice, right? You let them opt in. But some things like payroll is pretty black and white. Things have to be posted a certain way. They're not allowed to just change the Social Security rate, right. Or the limit and these types of things right. But at some level, if you think about it, these are things you probably don't want to handle as a firm or your firm's not set up to handle anyways. A client calling every other day asking these yeah, these minutia questions if you want to think about it that way. Right. Um, but I also at the same time, I think the reactions are silly. I actually think it's silly for Intuit this whole thing. And the reason why? Because I feel like they're trying to charge for glorified tech support ultimately. Right. And it feels a little like a money grab of like 600 bucks a year. But if somebody uses it three or 4 or 5 times, it's probably a loss for Intuit at this point. But then you have to step back and wonder, why would Intuit do this? Blake? Like, really step back on this. And so are you.
Blake Oliver: [00:31:50] Asking me because I have a.
David Leary: [00:31:51] Theory? I'm asking you more. In a second. I'll get. I actually have a question. I have a said ask Blake this. So when I get there, I'll ask you specifically then. So I kind of have a theory here. So if we think about the last 30 years tech support questions have never been recorded. Sure. Like somebody has typed what the customer called about into a CRM. Sure. They were recorded for quality standards, you know, quality control standards. People were employed by Intuit to go through thousands of phone calls to spot a trend to get product development that took 12 months to fix the problem or never fixed it right in the product, but at a massive scale, I would argue. For 25 years tech support has never been recorded. But now with this new service, all tech support is going to get video called Screen Sharing recorded, probably transcribed notes, because part of that QuickBooks live video service, they do all that notes taking and transcribing. Right. So basically full documentation of every question and answer. So here's my question, Blake, what would you use data like this for.
Blake Oliver: [00:32:52] You'd run it through AI and you'd build the best AI support agent in the world.
David Leary: [00:32:59] But why start charging 40 bucks or 50 bucks a month for that now?
Blake Oliver: [00:33:03] I don't know, tell me.
David Leary: [00:33:05] So when it's done, you now have people just paying 40 bucks a month for an AI agent, an.
Blake Oliver: [00:33:10] Ai support.
David Leary: [00:33:10] Agent support thing. Right? And now you can charge for your AI tool you're providing, which is what Microsoft, Google. See, Intuit never had a plan to charge for this. Now you can. So this is obviously speculation by me, but it's the only logical thing why they would do what essentially is tech support. Right. And I think branding it the way they brand is just because it's they probably market tested that and calling it like QuickBooks.
Blake Oliver: [00:33:36] It came out of helps. This all came out of TurboTax. They had the do it yourself product and people would get stuck. So they created the get help while you do your return. For an extra fee, you can video call with an enrolled agent or a CPA who will help you push your return through. And while they can't answer sophisticated tax questions, they can help you with the software and handle some of the really basic ones. This is the same thing just for QuickBooks bookkeeping. And if you ask me the reason, actually I'll dispute your theory. David. The reason they're doing this is because they must have some sort of data on churn, and that if customers sign up for QuickBooks and they have difficulty doing stuff, eventually if they don't hook up with a ProAdvisor they churn out. And retention is how you make money in a software subscription business. So by giving them help, you get them to stay with your product and.
David Leary: [00:34:33] Give them help for free. You don't have to charge for that.
Blake Oliver: [00:34:35] Well, it's a very expensive to offer this kind of help, right? So Intuit is just charging what they need to charge to offset the cost of that in the short term. But also like when you charge for something, people value it more. Also like if you give something away completely for free, they undervalue it. So there might be some psychology there. But like we know that a certain percentage, a good chunk of QuickBooks users never get connected to an accountant. It's like a lot.
David Leary: [00:35:01] It's a lot. Yeah.
Blake Oliver: [00:35:02] Right. It's it's it might be half somewhere in that realm. And so this solves it for the rest of those people. So if they can get them successful, they'll stick with QuickBooks forever. And the value of the company will just continue to grow. So that's my theory. You know, I don't think there's anything I really don't think they think that far ahead. Like nobody at Intuit is building some sort of like, super powered AI agent that's going to do bookkeeping for people. They're just solving for how do we, you know, increase this x percent this year? Everything's short term.
David Leary: [00:35:32] Because, yeah, because you keep so many X percentage of users on QuickBooks, eventually some X percentage of those users will eventually wind up with a ProAdvisor. An accountant. Yeah, I could see that.
Blake Oliver: [00:35:41] Uh, Tyler has read that book, David Who Moved My Cheese by Spencer Johnson. He says, great book for the.
David Leary: [00:35:46] Market validation here.
Blake Oliver: [00:35:47] I just have I just have to check David and make sure that he's not inventing phrases because every like, I don't know what it is, but like, we haven't read the same books, David. So sometimes you say stuff and I'm just like, what? What is this? Uh.
David Leary: [00:36:02] All right. What other comments on this? You want to pull them up?
Blake Oliver: [00:36:05] Go ahead. Feel free to call him out. I'm going to look for my next story while you do that. All right. We got some listener mail too, so I'll bring that up, Edgar Decker says.
David Leary: [00:36:12] Then lay off all the human support agents, which don't be surprised if that eventually happens. And then, uh, John Cronin. Cronin. I gotta get thicker glasses. Uh, David, I think you're on to something. Next time, we need to preface. Preface with David Silver hat corner. I don't know what that is. David. Silver hat corner. Do you know what that is?
Blake Oliver: [00:36:33] I have no idea. Maybe John can elucidate for us. I have some listener mail while we're at it. Um, we got this message from a listener who asked to remain anonymous, and he said, uh, I'm sharing it with you, this story, so you can share the info with others, but without using my name. Our revenue per full time employee is in the 240 to $250,000 range, so close to a quarter million dollars per full time employee at a small accounting firm. No one works more than 40 hours per week. There is no busy season between holidays, PTO, vacation. Everyone gets off four weeks per year. My take home salary for 2023 was 37%. I assume 37% of revenue. Accounting can be a good lifestyle business for owners. I don't have any magic sauce, but it works. So there it is. More proof to all of you ferm owners who are working crazy overtime, or people working in firms that are working crazy overtime during busy season that thinks this can't be done any other way. It can. And there are ferm owners who do it and don't work. A busy season.
David Leary: [00:37:47] Not to ask you to do math on the show, but I'm asking you do math in the show. What is that 37% approximately? Well, it.
Blake Oliver: [00:37:52] Doesn't say how many full time employees he has. So we can't calculate the revenue. We don't know what okay.
David Leary: [00:37:59] We don't know.
Blake Oliver: [00:38:00] But let's say you made $1 million in revenue. Then his take home pay would have been $370,000. Okay. And if he made 2 million, now you're up over 600, right. And it's it's three. Then you're like $1 million a year. Right. That's that's really good.
David Leary: [00:38:17] That's good. So maybe maybe instead of taking 42%, he takes 37 and keeps his whole staff happy and cared for, etc.. Yeah.
Blake Oliver: [00:38:26] Well the thing.
David Leary: [00:38:27] Could squeeze them.
Blake Oliver: [00:38:27] People seem to think that you have to, uh, give up revenue if you work less. But the answer is not true. You just have to do a different mix of services. So my my first piece of advice for anyone who's struggling with this is you probably don't have a lot of diversification in your firm, do you? You're probably doing a lot of tax returns, which is why you have a really bad busy season. So get away from doing so many tax returns and do year round bookkeeping services in addition to doing taxes, and only do the good tax returns, not the crappy tax returns. Easier said than done. But that's exactly what I know this guy. That's exactly what I'm sure he's done. So David Scully said tinfoil hat.
David Leary: [00:39:08] He's accusing me of having conspiracy. Corner is what he's saying.
Blake Oliver: [00:39:12] You do like your conspiracies? Of course. I, uh, I have less like. Yeah, I think. My philosophy is that people are stupider than we think, like in the movies, right? Every, you know, there's all these, like, brilliant evil geniuses out there in the world, right? But most evil in the world is just like, you know, steamrolling in industrialization. It's not there's no there's no mind behind it. It's just algorithms. Um, Aaron said, go ahead.
David Leary: [00:39:41] Aaron. Aaron from the chat said she probably nailed this perfectly. If it's anything like QuickBooks customer service though, dot dot dot, we're fine. Which it's a good way to think. Way to keep perspective. She obviously, uh, doesn't get upset when the cheese is moved.
Blake Oliver: [00:39:55] All right. So I'm just going to pick a random story in my list here. Here's a headline. Accountant charged with embezzling $800,000 from paving firm in California. This was in CPA practice advisor Angela Faye Brown, a 53 year old former accountant from Olivehurst, California, has been charged with embezzling over $800,000 from Viking Pavers, a paving company based in Richmond, California, where she was employed. The fraudulent activities occurred over five years from 2017 to 2022. I'm always interested in knowing how they did it. How do you steal $800,000 from your employer? Well, Brown created a fake payment processing account under the guise of the company owner, generated fraudulent invoices, and then directed payments to her personal bank account. So Brown was able to conceal conceal her activities for five years until discrepancies were noticed by a company manager, and that led to an investigation by the police and a forensic accountant who caught her. Bail is set at $2 million.
David Leary: [00:41:01] I imagine the invoices for a pavement company building roads probably are fairly large, so she probably is able to push very large invoices through.
Blake Oliver: [00:41:10] Um, yeah. So I'm thinking how what does this actually mean? Like fake payment processing account. So. The under the guise of the company owner, so pretended to be the company owner and set up a payment processing account and then created fake invoices. And paid those invoices using that payment account into her bank account. So basically set up.
David Leary: [00:41:37] A payment portal. Yeah. Sent a real invoice out. Somebody really paid that invoice, but it just siphoned it off.
Blake Oliver: [00:41:44] Yeah, it could be either way. Right. Either the R or the AP fraud. But you know, you wonder like this is the problem. You have an accountant who, um. Has too many too much access, right? Like, the very simple, um, internal controls is the person processing payments should not be reconciling the accounts. We learned that in school. And that's exactly. It sounds like the situation that she was in, she could process payments and she could reconcile. And if the separation of duties. Yeah, if you can do that, you can hide a payment fraud for a really long time because you just classify those transactions as something else in the books.
David Leary: [00:42:21] Yeah. To tie back to the QuickBooks story and me doing tech support way back in the day, the best call you would get and you would get it 3 or 4 times a year. Somebody wants to print checks from QuickBooks but not have the check be in QuickBooks. And really desktop those calls this you could do this. You could, uh, you could print the check and just delete the check, then put in the next one, print the check, delete the check.
Blake Oliver: [00:42:43] What would you do when you got a call like that? What would you say?
David Leary: [00:42:46] You just explain to them that, like, you could do whatever you want. You just tell them how the software works.
Blake Oliver: [00:42:52] So you were helping people commit fraud?
David Leary: [00:42:54] No. You would tell them it would beep and then it would record it and you'd.
Blake Oliver: [00:42:58] Tell them how to delete it.
David Leary: [00:43:00] Of course, because that's a different question.
Blake Oliver: [00:43:04] Oh, man. Um. Another random story. I'm just going to go through my list, David, if that's all right with you. Boeing needs another accountant as CEO, says Ryanair CEO. So are you familiar with Ryanair?
David Leary: [00:43:18] That's the, uh, the cheap airline, right? Yes. You have to almost have to stand up. Right. It's the.
Blake Oliver: [00:43:23] He wanted to. Yeah.
David Leary: [00:43:24] Super southwest airline, right.
Blake Oliver: [00:43:26] Michael O'Leary, this is Michael O'Leary. Um, built Ryanair into like their the southwest of Europe. Except they're like, no, they're more like the frontier Airlines of Europe. This is like the bare minimum on a plane. They charge for everything bringing on luggage. He wanted to have people stand on the plane for a while. That didn't go like he was gonna have a standing section, that sort of thing. But you can get like $15 airfare on Ryanair. It's a deal. Um, so he was, uh, he was interviewed recently and he said that Boeing's issues. Right. Boeing's problems with its planes stem from a lack of focus on day to day operations, rather than its shift towards a cost cutting, stock dividend oriented business model. And it turns out that O'Leary is a former accountant himself, and he believes that the best leaders are those who handle the repetitive daily tasks, emphasizing the importance of delivering products on time and with budget. And then he said that actually, you know, like there's been an argument that Boeing needs an engineer to be its next CEO, right? O'leary says, no, no, no, engineers get too caught up in the details and they lack financial vision. So he said. And he said pilots shouldn't be in charge either. Right. Because they just want to buy planes. They don't want to manage finances. So he says that they should put an accountant in charge of Boeing. And I'm thinking to myself, you know, as an accountant, like I do think there should be more accountants running businesses, but it, uh, there was another story. We're talking about southwest.
David Leary: [00:44:49] Both Southwest and Boeing. The bean counters started running the companies and it caused all these problems. It caused a culture problem at southwest. It caused southwest not to invest in the new computer system. Remember all those flights that were canceled by southwest the last year and a half? It's due to the bean counters. We covered that. And fundamentally, this is the problem of the culture of Boeing. It moved from an engineering first culture to a bean counter culture. And this is why bolts don't get installed, because it's cheaper not to install them. Right?
Blake Oliver: [00:45:17] They they moved the executives to Chicago from Seattle to save money because they got some sort of big deal that Chicago, South Carolina.
David Leary: [00:45:24] Yeah.
Blake Oliver: [00:45:24] And then the executives are no longer getting direct feedback from the engineers. And and then there's this focus on cost cutting. And the cost cutting eventually leads to quality control issues. And so yeah, I, I'm trying to picture like, you know, I'm actually really glad that Ryanair doesn't make its own planes because would you really want to fly on a plane where they had cut costs to the bare minimum?
David Leary: [00:45:49] Technically? Can all these planes fly with just one engine? Yeah, like accountants would just have planes with one engine flying around everywhere.
Blake Oliver: [00:45:57] But I think the issue is, is actually it's not, um, in defense of accountants in accounting. Right. It's not the problem that you have accountants running a business because they actually find a lot of ways to save money. Right? That's and southwest made a lot of money for its investors when the accountants were running the show. But the problem is that. The street like you like to say. David demands short term results. And so if you're running a company looking for short term results, you're not looking for the long term benefit of the business. And then that's the cost. The hidden cost. So the hidden cost of all of Boeing's innovation, you know, when they did all this stuff was that they're going to have quality control problems and you can't estimate the cost of that. Now we know what it is. Right. Like in terms of like the lost orders and the reputational damage. I mean, we can't still can't quantify it actually, but.
David Leary: [00:46:51] And as the, uh, my bonus, I'm an executive, so my bonus is dependent on the next quarter. You know, it's not what do I care if the computer system is a piece of junk a decade from now? Right. You're not going to come take my bonus away.
Blake Oliver: [00:47:05] Going back to the Intuit discussion. Right? This is why I don't believe in any conspiracies of big corporations, because they're too quarterly driven to actually plan that far in advance. Right? Every everything is like the next three months. The next three months. Um, that's what drives it. What else is new in the world? Oh, speaking of planes, the FAA is going to require more rest for air traffic controllers. We brought this up a while back as a story on the show. The problem with air traffic controllers being overwhelmed, overworked, airports having too many planes coming in and not enough people to direct them where to go, causing serious, scary near collisions at many airports in this country. On almost.
David Leary: [00:47:48] The reason we brought it to the show was the working conditions paralleled working at accounting firms a little bit. Exactly.
Blake Oliver: [00:47:54] Long hours. Now, if auditors are not well rested and do a crappy job right, there's there's not. Accounting is not a life or death type of occupation, thankfully. But with air traffic controllers, it is thankfully, the regulators, the FAA, the Federal Aviation Administration has recognized this problem. And to combat fatigue, they are increasing the required rest time between shifts from 9 to 10 hours and requiring 12 hours of rest before an overnight shift. And these changes will be implemented in 90 days. So very quickly. The only problem is that now they still don't have enough air traffic controllers, right? So will there be coverage gaps. And it basically the result will likely be that you will see more flights delayed due to non-weather events. And like when you see like that a flight has been delayed, but there's no weather event and it usually is like the airport you're going to doesn't have capacity to take flights, and that will be because they don't have enough air traffic controllers working. So they have to push everyone back. Um, and I've had that happen and I think it'll happen more frequently now. The FAA actually met its goal of hiring 1500 controllers last year, and aims to hire 1800 this year. So they are making progress, and hopefully we will not have one of those like really tragic, horrible crashes that you and I grew up with, David. I mean, I think like people today who are like 20 have no idea what it's like to grow up. And like every year or two, I feel like.
David Leary: [00:49:24] In the 80s, yeah, growing up, a plane would.
Blake Oliver: [00:49:26] Go down, right. I feel like it happened. Maybe it wasn't that frequent, but I remember the coverage. It was like a a mini nine, 11, you know, every few years. Yeah. All right. What do you got? I can just keep plowing through.
David Leary: [00:49:39] But I got an accounting firm was breached and. It. So the accounting firm is Barry, Dunn, McNeill and Parker, also known as Barry Dunn. They had a data breach, and there was a press release that was kind of from the law firm that was kind of going after this, the class action suit. But what happened was, is September 14th, 2023. Barry Dunn was notified by reliable networks of of suspicious activity on its computer network, which means unauthorized criminals have infiltrated reliable, inadequately secured computer network. So you probably are asking what is reliable networks? There are one of these third party companies that do the hosting and managed IT services and everything. They weren't secure. So now the accounting firm, what happened? Uh, data for a over a 1.1 million individuals was leaked, named social security numbers, dates of birth, contact information, all the important stuff. Passport numbers, government ID numbers. Yeah, but, like, what are you supposed to do as an accounting firm like you? You're doing your due diligence, right? Hire this third party IT company because they're the experts. They're going to secure this for me. And here we go again. Yeah, but.
Blake Oliver: [00:50:48] Now I really don't think there is anything you can do, honestly. Like, I've kind of given up, and I expect that my personal information in my medical history will be on the internet at some point. And, uh, it's like impossible. I mean, I think accounting is we're just lucky that health care has become a big target, you know? And now most Americans health information has been stolen after that last hack, um, with Unitedhealth's one of their, one of their subsidiaries. So, I don't know. I guess it's just try not to be the low hanging fruit, right? Uh, pick the company that is least likely to get hacked, you know, and don't use shared hosting environments if you can avoid it. Because that's the problem with these shared hosts is like, you get into one and then you get access to all of them. So yeah. Yeah. Um, before we go, David, I got to play a clip from marketplace for you. Marketplace has been on the accounting talent shortage beat. They do an episode or a story every year about it and sometimes multiple. And this year they did multiple stories. One I mentioned earlier in the show about the cost of tax preparation going up. They did another segment recently about how we don't have enough accountants, and they interviewed Mike Decker. Did I say that right? Mike Decker from the AICPA on this issue. And he said something that really stuck with me, and I want to play a bit of this segment for you.
Marketplace Clip: [00:52:05] This is marketplace. I'm Kai Ryssdal. True story. I got an email from my accountant last night about some documents I'd forgotten to send him time stamp on. That was 9:58 p.m.. Wrote him back this morning a little bit before five. Not two minutes later, he answered evidence in case anyone needed it, that accountants are working some very long hours ahead of tax Day on Monday, complicating the long slog of tax season for accountants. Mostly not the rest of us is that we are in the middle of an accountant shortage, and not just the ones who do taxes. Companies that are looking to hire CPAs and others in that industry are trying to figure out how to create a new generation of accounting professionals. As Marketplace's Elizabeth Trevell reports.
Marketplace Clip: [00:52:48] With so many accountant baby boomers retiring, Michael Decker with the American Institute of CPAs is looking at younger generations.
Marketplace Clip: [00:52:57] We're trying to change the messaging around accounting.
Marketplace Clip: [00:53:00] Cpa, not certified public accountant, but.
Marketplace Clip: [00:53:04] Coolest profession around.
Blake Oliver: [00:53:07] Coolest profession around. David. I, uh. I think that's the most cringe worthy thing I've heard this year. We're going to change. We're going to change the CPA from being certified public accountant to coolest profession around.
David Leary: [00:53:28] The best part I think about that is can you get the most boring? White male to say that in the most boring way possible.
Blake Oliver: [00:53:38] Yeah, right.
David Leary: [00:53:39] And that's what they've accomplished. Yeah. How is this going to work if that's who's saying this out loud? Right.
Blake Oliver: [00:53:44] Well, here's what's what's absurd about this whole. Statement. Okay, it goes to the Aicpa's primary strategy right now or tactic, which is we're going to make accounting. More appealing to students by changing the messaging around it. Accounting is actually a great career. We just haven't done enough to communicate what a wonderful career it is. And if we do that, then we'll get more people into the profession. So we need to promote it more, promote, promote, promote. Right. And um, so I want to address that bigger strategy. And then I also want to address this coolest profession around statement. So first I'm going to start with the small thing the easy target the coolest profession around right. Accounting is not cool. It has never been cool in the whole history of the world. Accounting has never been cool. And that's fine. That's great. We don't want accounting to be cool. Actually, the only time accounting is cool is when fraud is involved. When it's criminal, then it's cool, right? Who? What stories do you see on TV about accountants? It's always the accountant who's doing the money laundering, right? It's the accountant involved in the criminal enterprise. Okay, so we don't want accounting to be cool. It's fine. You know, we'll have stories about all that on TV and stuff, right? But like, accounting is not cool. And then the other larger issue is, is, you know, this we all know everybody listening to this show understands that it's it's not the messaging that's wrong. The reason we can't attract people into accounting is because the salaries are low, the hours are long, there's lack of flexibility, the culture is toxic. And a lot of these big firms, it's just not it's not a good it's the working conditions could be better. So until you address the working conditions, especially at large firms where most people start, you're not going to get more people to want to go into those firms. You're not going to get more people into the profession. So you got to deal with the underlying issue. You can't paper it over. And that's my statement. I'm sticking to it. Well.
David Leary: [00:55:48] Have you not seen Accounting Plus yet?
Blake Oliver: [00:55:52] I knew you were going to bring this to the story today. And, uh, before we get into that, I just got to say, uh, Edgar, I like that, uh, CPA should stand for certified pain in the. And you guess that. Are you talking about this story that was in Teen Vogue?
David Leary: [00:56:10] Well, I saw the story, but I've known about this site for a little while. Um, I just have been waiting to bring it up.
Blake Oliver: [00:56:17] Um, accounting plus, it's like Google Plus, but for accounting. Yeah, it's.
David Leary: [00:56:22] It's it's a website obviously targeting targeting a younger demographic. Right. Getting them, encouraging them to come into. Do you want to share your screen and bring it up? I'll uh.
Blake Oliver: [00:56:32] Yeah. Just the accounting plus like main site. I'll pull that up.
David Leary: [00:56:36] Joint accounting plus com.
Blake Oliver: [00:56:38] Join accounting plus com a lot of purple a lot of pink. It looks very Gen Z I like it. Accounting plus your guide to a limitless future. So tell me.
David Leary: [00:56:51] Tell me about it. So they're doing articles in Vogue magazine or Teen Vogue. And they're profiling different people's lifestyle and firms. And they're there's an effort happening here if you go to meet our partners and this is a collaboration, right? It is big accounting firms.
Blake Oliver: [00:57:07] And this is did you say this is the AICPA is leading this right. This is their one of them.
David Leary: [00:57:12] So if you scroll to the bottom I think it might be center of audit quality might be even part of this. Meet our partners. The big button. There you go.
Blake Oliver: [00:57:19] So these are accounting firm partners bigger firms. Obviously the big four are in here KPMG, PwC EY but also like BDO Aprio Deloitte's there for this, Grant Thornton, Mazars, IDE, Baillie, RSM and AICPA is doing this with Fe, the Institute of Internal Auditors, NABA, Financial Accounting Foundation. There state CPA societies in here a bunch of them.
David Leary: [00:57:44] Yeah. How many went to four times.
Blake Oliver: [00:57:45] Let's see four times.
David Leary: [00:57:47] Almost half 22 states.
Blake Oliver: [00:57:48] Yeah. Yeah about half yeah. All right.
David Leary: [00:57:52] So it exists. So the efforts are there. It's just like you said at the end of the day. So let's say this gets them interested, right. They discover the site. You've got their ears up. They're thinking about accounting. If they do any research and peel back the one layer of the onion, it's going to be very easy for them to find the things that aren't attractive about accounting. Yeah. It's like you like to say, it's like that lipstick on a pig. Now this is your saying, not my saying, right?
Blake Oliver: [00:58:20] Um, yeah. And here's the Teen Vogue article, the sponsored content that was in Teen Vogue that I saw. And I'm just thinking, like, okay, I don't want to just crap all over it, okay? Because I do think that there is value in promoting accounting as a career to young people in places that they wouldn't have encountered it before, like Teen Vogue. But also, if you're going to invest resources in this, maybe Teen Vogue isn't the best place right to start, right? Go after, I don't know, like I don't know what the demographics are the like. What do what do Teen Vogue readers want to do when they grow up? Right? I doubt a lot of them. I don't know, I'm not sure I'd be curious to know what the research is that went into this. But like, you know, in the.
David Leary: [00:59:02] First sentence, if you read that.
Blake Oliver: [00:59:04] Uh, the first sentence says in the letter, if you've ever uttered the phrase I'm bad at math, chances are you haven't considered accounting as a career path.
David Leary: [00:59:12] People are not reading the article after that sentence. There's doubt like you should have started with the ability to travel, you know? Have you ever thought about traveling the world and working in remote locations? Maybe you should consider accounting to start out with that negative thing just doesn't make sense to me.
Blake Oliver: [00:59:28] Yeah, the. Well, David, it is a it's a pleasure. It's an effort. They're trying, but it's not going to work until you address the underlying issues. Daryl says how come everyone talks about the 150 hour rule, and not many people seem to be interested in the time frame for taking the test? It's a good point, and I agree with you, Daryl. It is a problem and I don't understand why we have this time frame. Like why do you have to pass all the sections in a certain amount of time? Is it because like once you've taken the first section and you if like a year passes, you no longer understand the material, it doesn't change that much. I agree it's stupid, right? It's a requirement that they could drop. I don't think anybody would care. Um, he says I might be in the minority, but I believe giving people an 18 month window to pass all four parts is more a deterrent than the 150 credit hours, even the cost. Care to comment? Yeah, I think it is a barrier. I don't know if anyone's quantified it, but I bet it is because I know multiple people who I was in the same cohort with taking the exam who had to retake a section. And and I know one who actually quit because of it, said, I'm two years into my career. I don't need this. I'm not going to do it. I'm not going to retake the section. So yep, I think that would be one of those easy changes.
Blake Oliver: [01:00:45] And there's plenty of changes that Nasba could do just to make the whole process a lot smoother and easier. And actually, on that note, before we go, I wanted to share something I saw about, uh, like a solution that Nasba has offered. The accountancy licensing library. So this is, uh, this showed up just for me as a blog post on the Nasba website, nasba. The National Association of State Boards of Accountancy, which handles the CPA exam and the initial licensure, they have built what they call the Accountancy Licensing Library, or Al, to streamline the process of navigating each state's Board of Accountancy requirements and procedures to get licensed. And I thought, this is great. Now there's one place where I can go, no matter what state I'm in, and I can find out how to get licensed. It's a research tool. It helps you identify the states where you're most likely to qualify for the exam or for licensure, and then candidates can focus on their that, that jurisdiction. So like my transcripts. Right. Like I can I know that I'm going to be able to get licensed there because every state is slightly different. Right. All that stuff. Well, this is not something that anyone can get access to. Your you have to subscribe to it. You're and I think your firm has to subscribe to it. I can't even figure out how to get access to this. You have.
David Leary: [01:02:06] To. So it's paywalled basically or.
Blake Oliver: [01:02:08] Yeah. Yeah. So they set up this great resource that's going to help CPA candidates figure out how to get licensed in the best jurisdiction, and then they paywall it. And I mean, I know that like Nasba is supposed to be a nonprofit. Why are they why are they why did they do this? If they want people to get licensed, make it easier to get licensed, don't charge them for information.
David Leary: [01:02:29] Maybe they don't want I to to read the data. So people could just ask I this question in the future. I don't know. It says from.
Blake Oliver: [01:02:36] The general requirements to the specific procedures, each step is laid out in an easy to follow format with step by step instructions. Nasba has also included all official state board documents in a fillable PDF format. I would have loved to have that.
David Leary: [01:02:47] This should be open like this needs to like there should be a petition here. Nasba if you're listening.
Blake Oliver: [01:02:52] What?
David Leary: [01:02:52] What? Free the resources. What are they.
Blake Oliver: [01:02:55] Thinking? They just got a new president, by the way. I don't know, maybe maybe they'll listen. And that should be.
David Leary: [01:03:02] A tool on the Accounting Plus website, but Nasba doesn't seem to be a part of that. So by the.
Blake Oliver: [01:03:06] Way, when I got licensed and I'm sure a lot of, uh, CPA candidates are doing this, I had to make a spreadsheet, I had to make my own spreadsheet, and I had to figure out, like, here's all the requirements in California and here's all the courses I've taken. I had to try to add it up because it's like a very complicated matrix for making sure you have just the right set of courses and the right number of hours. And like it was not easy. And some people might say, oh, well, then, you know, that's part of the the challenge of becoming a CPA is you have to be able to do this kind of stuff. But like, we're too busy, like if people are working, right, if they're working, they don't have time for that. Uh, Edgar says if people pay for it, they value it more. You got me there, Edgar. You got me there. Uh, but but again, like, I can't even you can't even. They don't even have a form where you can buy it. You have to email al library at norsborg.
David Leary: [01:04:02] Assuming your email gets through, because a lot of times you email nasba emails balanced. Just yeah.
Blake Oliver: [01:04:06] All of my emails get rejected from Nasba because I can't get through their firewall. So all right David, as always, such a pleasure chatting with you. Thank you everyone who joined us on this Monday. If you are listening to us on the podcast feed and you want to interact with us live, subscribe to us on YouTube. Uh, we're up to over like 14,000 subscribers on our YouTube channel. Now. Millions of people have watched our shorts and you'll get so you get the best clips from every episode in your shorts feed on YouTube. If you use the mobile app and be sure to download the earmark app or just go to Earmark app in your web browser, we now have free CPE on the web. In addition to our mobile app. You can earn CPE for listening to this episode and many, many other podcasts. And the app just keeps getting better and you can earn one free per week if you want to support us. You can subscribe for the low cost of $130 a year for unlimited CPE. Thanks everyone and we will see you around here shortly.