The Accounting Podcast

We're back from the AICPA Engage conference sharing takeaways. Also, we're talking about all the latest generative AI developments in accounting, plus the recent PwC scandal in Australia.


Chapters
  • (00:00) - PREVIEW: The PwC scandal
  • (00:46) - Blake and David are back from AICPA Engage
  • (02:08) - Blake shares his mom's tax return horror story
  • (10:13) - Thoughts on the AICPA's 100th Town Hall podcast episode
  • (16:10) - How can AICPA grow Engage to be an even bigger event
  • (21:03) - It was great to see everyone at AICPA Engage
  • (27:11) - Advanced Auto Parts misses 10-Q deadline because they couldn't staff position
  • (30:37) - Accounting firms are getting sued for improper ERC returns
  • (35:31) - Checking in on the live chat
  • (37:31) - Intuit's AI announcement
  • (43:33) - CPA.com announces their own generative AI initiative
  • (44:50) - Spreadsheet company Equals launches AI Assist
  • (45:29) - ChatGPT makes up court cases in federal briefing
  • (47:59) - Ikea buys warehouse management SaaS company
  • (48:58) - Google DeepMind can create its own algorithms
  • (51:23) - Crypto scams are 5x more costly than other cyber crimes
  • (52:09) - Let's talk about PwC Australia
  • (01:01:25) - Wrap up and where to reach Blake and David

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Show Notes
Google DeepMind’s game-playing AI just found another way to make code faster | MIT Technology Review              
https://www.technologyreview.com/2023/06/07/1074184/google-deepmind-game-ai-alphadev-algorithm-code-faster/
 
Crypto scams five times as costly as other cybercrimes says study | Accounting Today
https://www.accountingtoday.com/news/crypto-scams-five-times-as-costly-as-other-cybercrimes-says-study
 
A Man Sued Avianca Airline. His Lawyer Used ChatGPT. - The New York Times
https://www.nytimes.com/2023/05/27/nyregion/avianca-airline-lawsuit-chatgpt.html?smid=nytcore-ios-share&referringSource=articleShare

Equals Launches the First Native AI Assistant for Spreadsheets
https://www.newswire.com/news/equals-launches-the-first-native-ai-assistant-for-spreadsheets-22045667
 
Intuit introduces proprietary large language models for fintech with GenOS
https://cointelegraph.com/news/intuit-introduces-proprietary-large-language-models-for-fintech-with-genos
 
Intuit (INTU) Introduces Generative AI Operating System
https://www.zacks.com/stock/news/2105195/intuit-intu-introduces-generative-ai-operating-system?cid=CS-ZC-FT-analyst_blog|company_news_tech_sector-2105195
 
Intuit Unveils Generative AI Operating System and Finance LLMs for TurboTax, Credit Karma, QuickBooks, and Mailchimp Developers    
https://voicebot.ai/2023/06/07/intuit-unveils-generative-ai-operating-system-and-finance-llms-for-turbotax-credit-karma-quickbooks-and-mailchimp-developers/
 
Intuit Introduces Generative AI Operating System with Custom Trained Financial Large Language Models
https://financialpost.com/pmn/business-wire-news-releases-pmn/intuit-introduces-generative-ai-operating-system-with-custom-trained-financial-large-language-models
 
Intuit Launches GenOS: AI Operating System for Financial Data
https://medium.com/@cryptomarket06/intuit-launches-genos-ai-operating-system-for-financial-data-6bf8f161ef3a
 
IKEA Parent Ingka Acquires Supply Chain Software Solutions Provider Made4net
https://www.pymnts.com/news/retail/2023/ikea-parent-ingka-acquires-supply-chain-software-solutions-provider-made4net/
 
Landscaping Business Sues Accounting Firm Over Alleged COVID ...
https://www.law.com/dailyreportonline/2023/05/30/landscaping-business-sues-accounting-firm-over-alleged-covid-19-scheme/
 
Intuit Expert BrandVoice: How Intuit Is Leveraging AI To Catapult The Role Of Tax And Bookkeeping Experts To Deliver Confidence Inspiring Customer Experiences           
https://www.forbes.com/sites/intuit-expert/2023/05/23/how-intuit-is-leveraging-ai-to-catapult-the-role-of-tax-and-bookkeeping-experts-to-deliver-confidence-inspiring-customer-experiences/
 
 
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Creators & Guests

Host
Blake Oliver
Founder and CEO of Earmark CPE
Host
David Leary
President and Founder, Sombrero Apps Company

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] How does something like this happen right now? It's just it's the definition of unethical. Right? And CPAs are supposed to be like the most ethical profession like that. That is like one of our core values is ethics. Right. And independence and integrity. And then you get scandals like this which talk about an image problem. Hello and welcome to the show. I'm Blake Oliver.

David Leary: [00:00:32] And I'm David Leary.

Blake Oliver: [00:00:33] And we are coming to you live from the NPR recording studio, just back from the AICPA Engage Conference in Las Vegas. David was great to see you as always.

David Leary: [00:00:43] You as well. Three nights in Vegas is just too much. I know it's really hard. Two nights is perfect. Three nights is too much in Vegas.

Blake Oliver: [00:00:50] Two nights is the best. But it's a it's a big conference. Right. And a lot of people stay for three, four, five days getting all the CPE they can. And there were some great speakers we got to see many of our friends who were speaking, many of our friends who were exhibiting, and the firm owners that we love to hang out with as well. So great to see you all. And I just I had a really great time, actually. We had a great.

David Leary: [00:01:15] Talk, 7 a.m. on that Monday morning with ShareFile, and it was well attended for 7 a.m. Monday session, 120, 150 people maybe. Yeah.

Blake Oliver: [00:01:23] Don't be afraid of those early morning sessions if you're a presenter, because there's all the people from the East Coast that come in and at 7 a.m. Pacific they are awake. They've been up for hours. So yeah, that was great. We did that with ShareFile. It was called, I think, Elevate and Modernize your client experience. And we got to do a basically a discussion between you and me and our friends from ShareFile about client experience and accounting firms, which I believe is a huge opportunity for firms. I think I've told you that story about my mom's tax return. David Yeah. Have I told you that on the on the show before?

David Leary: [00:01:59] Well, I don't think you told me on the show, but you told you told us in the presentation. So why don't you tell it in the show then?

Blake Oliver: [00:02:04] Well, I have more developments. I have more developments on this. So my mom has been a client of a small firm. I think they never had more than ten partners for, gosh, almost my entire life, at least 30 years. Okay. And always had her taxes done, always had a great relationship with the partner there. And that firm recently last year merged in with a top 50 firm, a name brand firm in Southern California. Like if you are an accountant in California or the Southwest, you know this firm. And the experience that she had this year was a disaster. Like I. She tells me these stories over the months and I could not believe what happened. So the way it started is normally she has a conversation with the tax partner, like a call just to say hi and go over anything new. That did not happen this year. This year, the very first communication from the firm was Here's your tax organizer and it was a PDF that she could not fill electronically. Now my mom's in her 70s, but she's pretty tech savvy and she knows how to fill a PDF organizer electronically and the firm center one that she couldn't when she called and asked, Hey, how can I fill this out online? They said no. The best thing to do is to print it and fill it out by hand and scan it back to us.

David Leary: [00:03:24] At least she has the courage to try to fill it out. I got my new tax organizer PDF in first week of January and I still have yet to try to attempt to fill it out.

Blake Oliver: [00:03:33] Well, she's a very diligent client, right? She does her job. So she said, okay, fine, I'll do that. So she fills it out, sends it back and doesn't hear anything, doesn't get the meeting scheduled or anything. And the next communication from the firm is a tax return. They send her the tax return and they say, here it is. We're ready for you to, you know, e-file, authorize us to do this. And she looks at the return and they've got her marked down as blind. They left out some big deductions for a real estate transaction that she had. Like it was just wrong. Okay. And so she writes back and she says, hey, hey, guys, you know, you miss this like like I'm not blind, You know, this. And then she, you know, finally gets gets back an amended return. And she's wondering, why did I get why did I get back an amended return.

David Leary: [00:04:22] If they didn't file a return yet?

Blake Oliver: [00:04:23] They filed her return without her authorization.

David Leary: [00:04:27] Oh, boy.

Blake Oliver: [00:04:27] Can you imagine? And this is a top firm and and that's what we were talking about in this client experience session. And the only I don't know I don't know what happened inside the firm, obviously, but the only thing I can think is that they just don't have procedures in place to ensure that every return gets properly reviewed.

David Leary: [00:04:44] Well, you have to have procedures. This is why when our listeners on their podcast players, they go to download the episode. It is the Cloud Accounting podcast, not some other podcast that we make because we have checks and balances to review things before it goes out the door.

Blake Oliver: [00:04:56] Exactly. And I actually think that, you know, we like to talk a lot in the thought leader world about all this amazing technology that's out there and all these things that you should be doing in your firm with generative AI and all that stuff. But like, we got to remember that a lot of firms still don't even have workflow software, like they're still using spreadsheets or maybe nothing at all to manage the work that comes in. And of course the consequence is that you are extremely inefficient.

David Leary: [00:05:21] But it could even be a paper checklist. You could still have a pen and paper checklist of things to do before a return goes out the door. It doesn't even. Technology. It's the procedure. All right.

Blake Oliver: [00:05:31] Just having the procedures written down. Right. But in my experience, we didn't really have procedures. It was all up to the individual managers and directors and partners to make sure that happened with their staff, like there was no firm wide system. So anyway, there's these accounting firms that operate like start ups where they do have electronic systems and procedures are just, you know, crushing it. And that was one of the stories I told in our session and what I was trying to get across, you know, in just in terms of like the opportunity. So like, I think the real.

David Leary: [00:05:59] Question is why are you not doing your mom's return for her?

Blake Oliver: [00:06:02] Because well, thank God my family understands that I am not a tax CPA. Right? I don't do my own return. Finally, David, I finally got a.

David Leary: [00:06:11] Return, though. Last week. We started our return though. Blake Oh.

Blake Oliver: [00:06:14] Yeah, yeah. So we are testing out TurboTax business and we started the process last week. We are recording our experience and we are going to release that video when we're all done so that all of our tax friends can see what the experience is like with into it on their full service business side, which they have now. Now they do business returns. They're competing directly with accountants in that regard. So we want to show you what it's going to be like. So we actually have that call today with our preparer today, this afternoon. I'm very excited we.

David Leary: [00:06:46] Get to meet our tax preparer.

Blake Oliver: [00:06:47] Yes. Yes. So so thank you, ShareFile, for bringing us and doing that session with us. And it's really cool, actually. We got to talk with Kurt, who is I forget his role at ShareFile, but he's like, Is he running the ShareFile show?

David Leary: [00:07:04] I think he's the he's been around Citrix for a very long time, but now the Citrix, I think they rolled things up and they're unrolling it. And now ShareFile is kind of its own thing and they're even rolling out features just for accountants. So they're, you know, you know, these things are big companies, right? They roll a budget up into one thing and it gets mixed up in the priorities. And now it's it's it's coming back, the pendulum swinging back to where ShareFile is its own thing, its own budgets, its own decisions. Right. Its own engineers, its own code. And now they're finally making momentum and adding a bunch of functionality around accountants.

Blake Oliver: [00:07:35] So we got to talk with the people who are making those key decisions, and it's really exciting to hear what they're up to. So that was great. We also had a booth for the first time at a conference for Earmark and a big, big booth backdrop that you made. David that said Earn CPE for listening to podcasts and we got a ton of signups. I want to thank you, David, personally for doing that. Well, that was awesome.

David Leary: [00:07:58] Quick fee. So this is quick. I mean, ultimately this is a dream I've had for a while because we've complained about this. We go to these conferences, we try to record, other podcasters try to record, and, you know, we're putting a boiler room, literally, we're underneath an escalator. We're at a floor where there's tile people walking by and you hear all their shoes as they walk by. And I've always wanted conference organizers to give places a place for people to record. And the opportunity arose with Jennifer Laura from Quick Fee, and she offered to give half their booth space to us to record it. And obviously you and I can't record for eight hours a day. There's just too much. So we recorded some interviews, but we opened up our equipment since we had all our equipment there and our engineer to other podcasts. So healthy, wealthy and wise accountants, recorded accounting high, recorded the high table, recorded things your accountant isn't telling you. They recorded some people that are starting brand new podcasts just use our equipment. It was really cool to like open up our stuff for the community for free to some extent.

Blake Oliver: [00:09:02] Yeah, that was great. Making making podcasting accessible to everybody, bringing out the voices that haven't been heard in the profession. That's what I love doing. So thank you quickly for for bringing us to the conference and, you know, helping us do that, because unfortunately, a lot of these organizers still don't understand the potential of podcasting and getting the people that are there, creating content, promoting your event. Like it seems like a no brainer to me, but it's like really hard. And it's not just AICPA that has trouble with this. Like a lot of the conference organizers don't get this. So thank you quickly for helping us do that. We also celebrated our one millionth download on The Cloud Accounting Podcast. David, you had cupcakes.

David Leary: [00:09:43] On the socials. Maybe, maybe that'll be the artwork. We have these nice We had cupcakes that were nicely decorated up and I didn't even have one because I was carrying around around them so much. I inhaled so much sugar. I didn't even have to eat one.

Blake Oliver: [00:09:55] Just you got people to eat the cupcakes. That was great. Yeah. We also attended the AICPA Town Hall's 100th episode. Congrats to the AICPA on their 100th episode of their own podcast, and I learned that as many as 9000 people tune in to that show every two weeks, which makes it very influential. And I think it's.

David Leary: [00:10:20] The most it's probably one of the best things the AICPA is doing by far. Now, I still do believe that we helped influence the. Creation of that show.

Blake Oliver: [00:10:29] You do like to mention that every time it comes up because basically they.

David Leary: [00:10:34] Remembering when Pepe the loan started going out and we were in this we kept we were we were doing 2 or 3 shows a week tracking the money. Where's the money? Who's getting the money? All the accounts, bookkeepers. We know their clients aren't getting the money. The IRS is saying numbers. And so, you know, Eric, it was Eric. What's his last name? Oscarsson Oscarsson. And then it might have been Mark Koetzle that came on at the time, who's no longer with the ICP. I think they came on our show like April 11th. We kind of had our own version of a town hall with them. And then April 20th they started doing their own town halls from that point forward because the way we were controlling the conversation. So this is really good that they're doing these. They hit 100 episodes. I think they're at like 800,000 downloads. It's great. Yeah, it really is good that they did that.

Blake Oliver: [00:11:18] And I really like the recap they do. They do the recap of of what's going on in Washington politically, which I think is great for accountants to know. Like, here's what's influencing us and our clients potentially.

David Leary: [00:11:30] And you get a little behind the scenes what's going on. So, I mean, this is news, but there's the we talked about it last week, the the debt ceiling change. And we reported that the IRS has 10 billion less.

Blake Oliver: [00:11:44] Well, yeah. So I guess it went up after we recorded that episode. So now it's well, and it's funny because in the actual bill it was only 1 billion and change that was taken out of the IRS budget. But there's a side deal to take 20 billion out of the IRS, 80 billion extra that it got. And that was not in the bill. That's still like a handshake agreement. So and it's.

David Leary: [00:12:08] A complete bullshit way they're taking it out. So basically, there's going to be the $20 billion is going to be kind of in a bucket over here and any other government agencies that may be they have a budget concern or they need some money, they're allowed to go dip in there and just take some like it's the most bullshit thing I've ever heard of in my life. And it's a handshake deal. Like it's on.

Blake Oliver: [00:12:28] Yeah, well, like you said, David, very intelligently. It doesn't really affect anything in the short term because that 80 billion was over ten years and there's no way they're going to spend it all at the beginning. So they're really just taken from the end. So if politics change, if administrations change, then the IRS could still end up getting just as much funding. Right. It doesn't actually change anything right now. It's an accounting trick.

David Leary: [00:12:50] The IRS is an accounting trick. We're short $20 billion and just go earmark it all to themselves right away.

Blake Oliver: [00:12:56] So, you know, there is one thing about the AICPA town hall that kind of bugs me. It's the fact that they call it a town hall. And I know there's something about town halls that are different than what the AICPA does. And so, you know, I asked ChatGPT what is a town hall style event? And ChatGPT said a town hall style event is a meeting or gathering where members of a community have the opportunity to directly engage with public figures. It is called a town hall because it aims to replicate the open discussions and democratic decision making that often take place in town halls. In this format, participants can ask questions, express concerns, share opinions, and receive responses from the invited individuals. It fosters community involvement and allows for direct communication between the public and those in positions of authority. So the one thing I would suggest to the AICPA, if they want to really improve their town halls, is to make it more democratic and more open and not filter those questions that people are asking, those comments that people are making in the chat. Because we know on my favorite topic, the 155th year of education topic that is not popular in the profession and the AICPA could actually do something very, very easily to figure out just what people want. They could do a live poll on the town hall, ask the 9000 CPAs that are there in the audience.

David Leary: [00:14:17] Significantly, significantly significant.

Blake Oliver: [00:14:20] Yeah, it's huge. Right? It would be a massive survey. Give people the options and see what they think. And I think AICPA would learn 150 is like 80% of the profession wants to change because that's what we saw with BDO.

David Leary: [00:14:33] On the town hall could discuss this with them. That would be my dream.

Blake Oliver: [00:14:36] Yeah, that's going a little far. David. I don't know if that'll happen, but you know, we did have some really productive discussions with AICPA people and, you know, our listeners know that we have not been able to get media passes to these events in the past. Last year we were denied media passes. And, you know, I got to be honest, that really upset me. And it did not put me on a good footing with AICPA. But I know there's lots of good people there. I know that's not everybody. It's a small group that said no, but we had some really productive discussions with them. And I think, you know, I want to thank Casey Johnson for being our advocate there. And we're going to be media at Digital CPA this December and hopefully next year at ACP Engage. And we don't have to play these games with, you know, getting sponsors to bring us to the event. And, you know, I hope we can help. I feel like there's a lot. Of CPAs that the CPA isn't hearing from because they don't go to these events, but they do listen to our podcast and we can help bring that voice to the CPA and be a bridge.

David Leary: [00:15:41] Talked about this before, like inclusion, diversity, etcetera. But if it costs $3,000 to go and a lot of these bigger firms have policies like only partners get to go. It really makes these events not as inclusive as they possibly could be.

Blake Oliver: [00:15:53] But I on that note, David, on that note, let's think about this, right? Aicpa Engage has how many attendees?

David Leary: [00:15:59] 3500 were there, probably. It's hard to tell because it's three stories and you don't drive everybody to the Expo hall. So it's hard to tell.

Blake Oliver: [00:16:06] 3000 or so, right? Yeah. There are 660 approximately licensed CPAs in the United States. 600,000. Okay. So we're getting a fraction of a percent of all of the CPAs, not to mention there's millions of accountants. So what I would love to see is for AICPA engage to become bigger. Like way bigger. There should be tens of thousands of accountants at AICPA engage if it's really you know, it is the premier accounting event. It is the biggest event for CPAs that I'm aware of in the country.

David Leary: [00:16:44] Right. It's like the Super Bowl of our event. But you're right, if it's a Super Bowl, we should have 30,000 attendees, not 3000.

Blake Oliver: [00:16:51] Exactly. So how do you do that? Right. And I would love to see the ticket prices go down. And yeah, you know, the aria is nice and like the event is really nice, but I think it would be better to prioritize getting more CPAs there to figure out how to bring down the prices. And then also, like I think the the thing that we agree with the AICPA on when it comes to the talent pipeline is that accounting has an image problem. The CPA has an image problem. So what better way to restore that image problem to like make it make accounting look cool than to have tens of thousands of young accountants coming to Las Vegas to enjoy education and entertainment. So what if we got the firms to not leave their staff back at the office, but actually bring them to engage and show them a good time?

David Leary: [00:17:42] I mean, they're trying. Mercedes-benz was a sponsor, so they rolled in two electric vehicles, the really nice new electric Mercedes. Where did you sit in it? No, it gives you a massage. It's a massage chair, like it's amazing in the driver's seat. So but I learned something from the Mercedes-Benz sales guy. Members of the AICPA get a discount through Mercedes on cars Like they should be playing this up, like.

Blake Oliver: [00:18:05] Yeah, I mean, I knew about the life insurance, but I didn't know I could get a Mercedes.

David Leary: [00:18:09] You want a discount on a Mercedes Benz, become a CPA. They should be. These are member benefits that, you're right are lost in the shuffle that actually helped change the image.

Blake Oliver: [00:18:18] So so this is one thing that I think we should really work on. Changing as a profession is, you know, you want staff to feel engaged, bring them to engage. Don't just bring the partners in the senior managers. David, you were on the show floor more than I was, right? How many staff did you meet?

David Leary: [00:18:34] Not much staff. It's mostly it's leaders, right? Leaders at firms, leaders. But it's also in general, just the shipping out the floor. The floor was tough. So the way the venue is, it's like three stories and the show floor is on the bottom and the show floor is actually split because they have so many vendors, which is great. But it's but it's too it's like having two show floors. Yeah. And it takes a while. There's a lot of vendors to go through and meet and talk to and browse, you know, if you're an attendee. But the ICP didn't do much to drive traffic to the show floor until the very last night. They had a closing reception with a lot a decent amount of food and the best energy of the event on the show floor was the last hour and a half, unfortunately. Right. But for the previous three days, it was a little bit of a ghost town. And this is where my suggestion, because they serve the food on the other floors, it's like serve all the food in the expo hall, get people down there because that's where you get nice energy.

Blake Oliver: [00:19:27] And the vendors Intuit does. That's what Zero does. That's what Suite World does.

David Leary: [00:19:30] Yeah. What it does with scaling new heights like you, it keeps everybody follow the food show floor.

Blake Oliver: [00:19:40] Well.

David Leary: [00:19:41] And then what else was interesting that went down that we saw?

Blake Oliver: [00:19:45] Well, I got to connect with a lot of people that I haven't connected with in a while. And Donny Shimamoto was one of them, ran into him at a happy hour. And, you know, it was great. I got I learned so so Donny, he's he's told us on Twitter, he's told us that, you know, he wants less opinions. Right. More news. We hear you. Unfortunately, there's just not a lot of data when it comes to like the future of the accounting profession. Right. I want the state societies and AICPA to do surveys and to find out what's going on. Well, Donny also agrees, and he's tired of there not being data. So he has taken his he has taken the initiative to go out and do a research study on this stuff. He's doing a staffing research study. And part of it is going to include finding out about education requirements and is this harming the profession and what do people think about it? So I've invited him to come on the show and talk about the results when they're available. I hope he makes it.

David Leary: [00:20:39] He was on a panel or something. He stirred the pot a little bit. I was really happy to hear that. Yeah, he was stirring the pot.

Blake Oliver: [00:20:44] So it's nice to it's nice to hear that, you know, people are like, we're going to we need to actually listen to the profession if we want to solve the problem. So that was great.

David Leary: [00:20:53] We should talk about the kind of the unconference that happens at ACP and Gage. If you recall an unconference, I don't know what a better word would be. Cabanatuan Cabanatuan.

Blake Oliver: [00:21:03] So, so well, so this goes to your, you know, your thoughts on the Expo Hall floor. And I agree with you that it's like too big. It's also very expensive to exhibit. And so a number of startups have decided not to exhibit at ACP in Gage because of the low traffic and the, you know, big Expo Hall floor. And to simply rent cabanas at the pool for several days, which costs a fraction of the price of exhibiting. So I got to sneak out a little bit and enjoy some of the Las Vegas Sun.

David Leary: [00:21:33] But not just that they're renting cabanas. So they're basically they're doing their own unconference on the on at the venue. But there's accountants that are coming into town not not paying for an ACP Gage badge. They're not attending ACP and Gage Sessions. They're just there because there's people there with networking with and there's hanging out at the pool and then some are listening to earmarking their CPE that way.

Blake Oliver: [00:21:55] So yeah, you know, I feel like I feel so pumped having gone to the conference because I feel like there's this group of us. Accountants who have small firms, accountants who have gone to work for startups and apps and accountants, you know, in the societies who, like we really care about this profession and we all get together. And I feel like I've actually found my tribe. And it took me like half of my life to do that. But now I feel like I have it and I want more accountants to feel that way too. So I want to figure out how do we get more of the younger generation out to these events and having a good time. You know, it's.

David Leary: [00:22:39] Maybe it's the pool. Maybe for those younger ones, they just have to get a hotel and a plane ticket and they can attend a pool.

Blake Oliver: [00:22:44] Well, yeah, The problem is it's you know, it's pricey. Right. And like, you don't make this is the problem with accounting is that all of the rewards occur like ten, 15 years down later in your career where you really make the money as a partner. This is the problem with the partner model. The staff don't make very good money and the partners make great money and people are dropping out before they make it. They're given up. And we got to solve this problem with the profession like it doesn't work anymore. Right. And it's it's because external factors have changed, right? The cost of living has gone up to the point where 70 or $80,000, you cannot save up a 20% down payment on a house. You could do that in two years back in the 80s, 70s or 80s. Now it would take you ten years to save up a down payment on the exact same salary. It's just unsustainable. And so people say, well, you know, if I can't have my American dream, why would I why should I put off a higher salary? Right. Like, it's just the fact of life. It's just the way we have to change as a profession. We got to figure this out. And so, you know, democratizing the CPA firms, making it not take so long to get equity, giving staff a voice is is the way forward. I don't see how else we do it. We can't have this situation. Keep going. In the new firms.

David Leary: [00:24:10] Aren't doing it. The best quotes I heard from somebody, you know, so many discussions. I don't even know whose mouth this came out of. You know, essentially they were in one of the sessions was talking about how accounting firms spend almost 20% of the of someone's salary to recruit an employee. So if they're paying 100 grand a year, they're going to spend 20 grand to recruit them. And it's like, why not just pay everybody 20% more and stop having to chase and constantly recruit bodies to your firm? And I was like, oh, that's that's like the simplest solution of all of this. Like, just, just just shift the hiring budget that you're blowing and just give that to employees to begin with. You would think instead of chasing new employees.

Blake Oliver: [00:24:50] I want to thank all of our listeners who have joined us live this morning. Taylor says, yeah, the events are very unaffordable for young CPAs or even non CPAs. I feel like a lot of CPAs are going in business for themselves and I agree that's what's happening is they're leaving and if they're not leaving the profession entirely to go do something else because the job market is so hot, they're starting their own firms because all you need is a laptop these days and an internet connection to start your own your own firm. The cost of starting up is is very low. And that's why taking all the way back to the discussion about my mom's small firm, that's why they're merging into bigger firms because there's no succession plan. But that's only a temporary fix because these large firms have their own internal struggles. They don't have succession plans. And you can see it in the disaster that is the client experience. So we're just pushing the can down the road, kicking the can down the road. With this. There's a serious problem that is building and. We got to do something about it.

David Leary: [00:25:52] I think this is a good transition point because wasn't there something in the news like the first day you landed, somebody tagged you in Twitter about somebody couldn't file their quarterly reports, a public company because they don't have accountants.

Blake Oliver: [00:26:04] Yeah. Yeah, I forget exactly which company it was. I'll have to look that up. But there.

David Leary: [00:26:09] Was an auto parts, one of those kind.

Blake Oliver: [00:26:11] Of advanced auto parts. Right. So advanced auto parts, I think it was in their 10-q or their quarterly financials. They missed the deadline. And why did they miss the deadline? They said it's because they couldn't staff the position to do the 10-q. So this is the beginning of right and we saw this with cities. There are nearly 100 cities that have lost their bond rating because they couldn't file financial statements with the bond rating agencies or the bond rating agencies couldn't rate them because they didn't have financial statements, because their audit firm couldn't do the audit or they didn't have staff to put together the financials. Like it's starting to become a problem in the real world, not just inside of our firms. And my worry is that if it becomes a big enough problem in the real world, that state legislatures will say, well, if the CPAs can't do the job, then we're going to let the non CPAs do the job. And. The CPAs will lose the audit. We have exclusivity on financial statement audits, but if we can't do them at the right price at the right time. That's not a guarantee, right? Like we were given that because of our reputation as a profession. If we can't deliver, we're we're going to lose that. And that's the beginning of the end. That's that's the warning, right? That's the worst case scenario in many ways. Yeah. Dan says large firms are taking advantage of the 1 to 10 head count firms. Big consolidation happening. Yeah, because they don't have the they don't have the internal succession plans. So these 1 to 10 firms have to sell and they sell at a steep discount. Right. They're not getting the multiple they were hoping for. But I think the big firms. Right. While they might see a quick win by doing that, they still don't have their own succession plans. So like it's I think the problem is going to be the same for them. It's just down the road a little bit like five, ten years from now. Yeah.

David Leary: [00:28:14] They're going to.

Blake Oliver: [00:28:15] Start having trouble.

David Leary: [00:28:16] Like, Oh, this is an easy way for us to boost our head count and get some employees. But if your culture and your company is not set up right, those people are eventually going to quit anyways. And what are you going to buy? More firms?

Blake Oliver: [00:28:25] And it's a symptom of the obsessive focus on top line revenue in accounting firms and especially big firms like the ranking of firms is by top line revenue, not by profit, which is insane to think about. Like, what do we care about in the end? We don't care about how much revenue we have. We care about how much money we take home. But we rank all these firm based firms based on top line revenue and we reward partners based on top line revenue. I mean, that's just a stupid way to run a business. You ask any other, you know, business owner like what you prioritize and top line revenue is not what you prioritize. You know, only really stupid startups like the startups that we like to make fun of. David Prioritize top line revenue and go spend billions on Google ads to generate, you know, millions in customer revenue and then they go out of business.

David Leary: [00:29:13] It's just a email addresses in many cases, right?

Blake Oliver: [00:29:16] Yeah, exactly.

David Leary: [00:29:16] Most email addresses we win. Yeah.

Blake Oliver: [00:29:20] So, David, let's get to the tech news. Unless you've got something more to say about engage, I don't have that.

David Leary: [00:29:26] But I do have like a just an interesting article about a client suing an accounting firm. And it's an article this is just a lawsuit has been filed and it caught my eye. So do you remember when towards the end of the pandemic? I think it's the comedy store in L.A. They sued their accountant because they never filed for their loan on time or loan on time or something, or the restaurant revitalization or something.

Blake Oliver: [00:29:49] They said that this is the comedy store, like the famous stand up comedy franchise venue. There's a bunch of them, right? They sued their accounting firm because the firm didn't get their peep like they didn't file on time. So they missed out on the peep funding.

David Leary: [00:30:04] Well, so now so what caught my eye? It says Landscaping business sues accounting firm over alleged COVID. And then it's dot, dot dot. It doesn't have the whole article title listed there, but essentially the suit accuses the defendant of inducing Acer landscape services to apply for tax credits that the business did not actually qualify for, causing it to obtain a payment of 1.4 million fraudulently. And the defendant. The firm received $300,000 in commissions. And I was like, Oh, here's another story about an email, right? We talked about this, right? Well, then I drill down, so I search. So it's the landscape companies, Acer Landscape services and the accounting firm is Lasseter and Lasseter. So I pull up Lasseter and this was filed in Tennessee Middle District Court. So I pull up Lasseter and Lasseter. They've been around like 28 years. It's multigenerational kind of family firm. But when I search for them on Google, the very number one hit is their landing page, and the number two hit is like their about page. And then three, four and five are just some random people with the name Lasseter in their name. And then number six is Ertc funds for EW.com, which basically takes you to a masked page of lesser and lesser CPA page of one of their subcontractors that's directly targeting Ertc. So. I don't know what to make of it. It's just things are these businesses that are going to be on the hook with the IRS. If there's incorrect claims, they're going to start getting desperate and have to file lawsuits. Right. And and who knows how aggressive they were? We don't know. Like it just says this lawsuit was filed and who's in it?

Blake Oliver: [00:31:40] So so basically, it sounds like this firm was kind of operating like an IRQ mill. They were doing these improper applications.

David Leary: [00:31:49] We don't know a proper we don't know for sure. But obviously they were leaning into it because. Right. Well, if they've done it for their firm, you get an IRC page. Right, right, right.

Blake Oliver: [00:31:57] So they're leaning into it and then you have all these other CPA firms that maybe they aren't doing it themselves, but they're referring out the IRC work to a mill and getting a piece of the action. And this is the warning for all the firms that are doing that is if you are signing the return, you are the one that is at risk. You are the one that will get sued, not the IRC mill. I mean, they could get sued, too, but they're probably going to be gone. And in the Bahamas by the time you get sued.

David Leary: [00:32:24] So. So that's a chance. Maybe they didn't even do this. They worked with somebody else who did it, who pressured the client, and maybe that other company's gone. The lawyers are like, well, let's do the firm. Yeah, there's no details on this, but I just thought it was interesting. Oh, here we go. Like, now they're suing the firms because of the fraudulent, I think, COVID activity.

Blake Oliver: [00:32:41] I think that we are going to see a massive number of lawsuits against CPA firms for these improper claims. And the firms may not even have done the work. They may have just referred it out. But if you if they sign that return file, that return like it's they could be liable. Yeah.

David Leary: [00:32:56] So the argument is going to be you're supposed to watch out for these things. You're my CPA, right?

Blake Oliver: [00:33:01] You're a CPA. You're trusted, right? Yeah. Better have that insurance. We've got some more feedback from our live viewers, Jessica says. And the large firms are buying smaller firms because they can't find workers any other way but to acquire them via buyout. It's an interesting time even in rural areas for small CPA firms. So I agree that's probably the reason the firms are large firms are motivated to acquire is they need people. But what if they can't hold on to the people? Then they've bought this book of business. And you know, my mom's an example. She's going to turn out because of the bad experience she had. And now they've got all these staff that are, you know, operating in a system they don't understand. It's disorganized like that. Could the churn in the next few years could end up making those acquisitions not very appealing?

David Leary: [00:33:45] And aren't they acquiring just to get bodies like employees? Right. They're not. Right. Right.

Blake Oliver: [00:33:50] But there's no guarantee those employees are going to stay. Yeah. So Tino said regarding the advance auto parts advance auto parts currently has three job openings and none of them have salary information. Two of those are hybrid and it's based out of Raleigh, North Carolina. I doubt they're paying at or above 100 K for any of those three accounting jobs. Yeah. Who would want to take an SEC reporting job at a public company for less than that? No salary information. Good point.

David Leary: [00:34:19] If you have those open right now, you know, I don't have the what are the salary or not the the requirements. They want you to have a CPA. What's the.

Blake Oliver: [00:34:28] Oh yeah. Yeah. Are they are they are their requirements ridiculous as well. Because that's the thing I always see online is, you know, we want a CPA with ten years of experience and we're willing to pay $60,000 for our controller position. Right. And the problem is, of course, that the management just sees this as a compliance function. They don't see any value add and so they want to pay as little as they can for it. The problem is there just aren't enough people now to take these jobs, right? Nobody is willing to do them. Tino said. Cpa preferred. So it is CPA. They're saying CPA preferred, but they're not saying you have to be a CPA. That's interesting. Yeah, people are getting desperate. All right. We said that we would talk about Intuit and their generative AI initiative. So David, I have not read the press release. I hope you have. So because I'm putting on the spot, this was everywhere.

David Leary: [00:35:17] And it's kind of confusing because they call it Gen OS and you know, it's picked up all over the place and I can't make heads and tails of it fully. But then I do have the actual Intuit blog post or press release. We can go to that. But in the announcement I'll just kind of give you some numbers. And I know we talked about this last week. I think I talked about how many patents they had. So I'll just read this out verbatim. The company has 400,000 customer and financial attributes per small business, as well as 55,000 tax and financial attributes per consumer and connects with over 24,000 financial institutions, with more than 730 million are AI driven interactions per year. Intuit is generating 58 billion machine learning predictions ready per day. 58 billion times a day. Intuit is pumping out machines.

Blake Oliver: [00:36:07] I don't even know what the I don't even know what that means. Like, well.

David Leary: [00:36:11] Bank feeds every time it makes a decision, right, about a bank feed or a piece of data, you know, it starts to add up. But so they have all this data. And so what they've done now is let me open up the other article here. So it looks like what they've done, they're opening up, they built they call it Gen OS, and that's going to empower the and this is all this verbiage in these press releases Intuit technologists to design, build and deploy breakthrough generative AI experience with unparalleled speed. So it looks like they've they've basically built a tech stack internally for their own employees and their own teams to use this reading between the lines. In some of these articles, there's a vibe that maybe this gets opened up to developers. So imagine all those apps in the QuickBooks App Store can now maybe tap into some layer of this, right? That would be so smart. It's four layers, right? So what they have is they have four core components. They have Gen studio. So basically this is the development environment allowing the Intuit developers to experiment and refine generative AI experiences.

David Leary: [00:37:10] They have gen runtime, which is a layer that chooses the right language model in real time and calls the right data in real time. So if you need to. Basically it's a layer of AI that's going to give you the two pieces of things you need to build the customer facing AI. Then they have Gen UX, which is the library of user interface components to ensure there's clear, delightful, transparent experience when you interact with the LMS. So they're building their own LMS, and then they have the financial large language models. So these are custom trained financial LMS that specialize in solving tax accounting, marketing, cash flow, personal finance challenges. They can provide actionable insights and invoke actions like contacting human experts. So the more I kind of start reading this more and more, this isn't about Intuit adding AI to their existing products. They're going to launch a brand new product and you're just going to use it and it's going to it's going to be their own version of a ChatGPT or whatever they're calling it and f.l.m. F.l.m is probably, you.

Blake Oliver: [00:38:08] Know, financial large language model.

David Leary: [00:38:10] And you're going to use this for everything your personal finances, your taxes. You're going to use it for your small business. And I was thinking about that. I was saying about the whole expensify stuff, I'm like, Intuit should just buy Expensify and roll that in because there's so much like directional overlap in their visionary wise, it feels like. But we've been predicting that we're going to release something. They released a press release, but it sounds like there's a lot more. So I'm trying to reach out to Intuit so we can get somebody to talk about this at a deeper level. But it's a it's a lot. I mean, they're building a whole technology stack. We're just not We added AI to QuickBooks.

Blake Oliver: [00:38:46] If they if they deliver on this and build OpenAI ChatGPT for accounting tax finance that solves the problems that we have with these LMS right now, which is that they're not specifically trained for our profession. And if Intuit solves this and opens it up to all of the apps, that will just turbocharge all the data they have and. It could it could stimulate. I mean, I'm thinking this is like this is like when the QuickBooks App store opened up and it went to hundreds and hundreds of apps. Just how much that changed the lives of accountants and small business owners. That was cloud accounting. And now we're going to do it again. Another ten X improvement in productivity or more with AI. And, you know, like the number one, I think immediate use case of these models in like QuickBooks is just completely automating the coding of transactions to the point where like we're barely doing any of that. It's just automatically going from the bank feed into the general ledger and it's 99% accurate and we're only touching the 1% that AI doesn't really know what to do with and it surfaces those to us and we can look. That's like we could have we could actually have instant financial statements like always up to date.

David Leary: [00:40:03] And if I go back even before I left Intuit, there was these visions of like the developer API version four. And what it would be is Intuit would actually put the transaction together. So if you're a developer and you have half the transaction, a piece of a transaction, maybe you're a construction app and you send some data over to QuickBooks and Intuit gets something downloaded from PayPal and maybe something from the bank and Intuit, in theory, the developer platform could figure out what the accounting transaction is and then push that in. And this is that second layer of that, right? Like, you're right, this is probably coming where the accounting data is going to get into the accounting system. All by itself, except for maybe 1% of it. And that's that will be the. So everything. Yeah there are what is this the financial large language model. Is that what they're calling this. Yeah. Every time it's confused or can't figure out, it's going to stick it in the account and Exactly. In QuickBooks.

Blake Oliver: [00:40:58] Yeah. But instead of 90% of the transactions that are clients code into that, it'll be 10% of the transactions. That's the hope. Right. So we also had an announcement from CPA. Com at the event at, at RCP Engage they announced their own generative AI initiative that will consist of an ecosystem of an ecosystem scan of software partners experimenting with AI and large language models in their products. They're going to do an AI symposium that will bring together subject matter experts from practice leaders and others to exchange strategies and information on the real and potential impacts on the profession. I think that's going to be.

David Leary: [00:41:34] A revenue grab. Hey, we're all these AI startups are getting all this funding. Let's have a symposium, charge every one of these startups to come to our symposium. It's like, Yeah.

Blake Oliver: [00:41:43] Yeah. You know, if we get.

David Leary: [00:41:44] Invited to that, I probably just blew it now.

Blake Oliver: [00:41:46] But yeah, thanks, David. You can invite me, leave David at home. An AI specific cohort within the 2024 AICPA and CPAacademy Startup Accelerator to support the growth of early stage companies using this technology to benefit accounting and AI focused training. So they're doing a webinar on October 24th about generative AI, the great equalizer and dedicated sessions at the Digital CPA Conference. Any other tech news this week that we got to talk about that we didn't get to?

David Leary: [00:42:18] I feel like I'm still in my news folder. I didn't even get to the tech news yet. Well, I is tech.

Blake Oliver: [00:42:23] Tech is I.

David Leary: [00:42:24] There's a spreadsheet company called Equals. And they've they've launched their first native AI assistant for spreadsheets. But it goes back to some of the things we loosely talked about months ago, where one day instead of you typing the formula, you're going to be able to type and it's going to create the formula for you. So essentially they have a hotkey to do it, but basically it launches their AI assistant feature to help the user write and debug SQL queries and connect to databases. Right. Fixed and explained formulas in any cell and edit and summarize charts in the spreadsheet. So you're going to be able through natural language, you know, fix a formula, create a formula, that type of thing, which we thought was the natural evolution and ensure Excel is going to do this. And I'm sure Google Sheets will do this too.

Blake Oliver: [00:43:04] Did we talk about the lawyer who used ChatGPT on the show? You know, the lawyer who, like used it to submit a brief to a federal court and it made up a bunch of crap.

David Leary: [00:43:13] I think we've we've we've had a couple other lawyers do some stuff.

Blake Oliver: [00:43:16] But where was that? Just online on LinkedIn. We talked about it. So a New York lawyer has admitted to using an AI program to do his legal research and submitting a brief to a Manhattan federal judge that cited bogus court decisions. The lawyer, Stephen A Schwartz of Levitow, Levitow and Oberman submitted a ten page brief that cited more than half a dozen relevant court decisions. And it just made up these court decisions. They didn't exist. And he said he learned about ChatGPT from his children, his adult children, and he didn't realize that it would make stuff up. So let's talk again about this ChatGPT hallucinates. It makes stuff up if it doesn't know the answer. So check. Check what it says. You cannot rely on it to be. You need it to be fact checked. Yes, fact.

David Leary: [00:44:01] Checked. Maybe you just need to warn. I know there's always legislation in this and all this, but it's just a little warning that like, hey, you should review these things before you actually use them. You know, I.

Blake Oliver: [00:44:11] Think it does. It even says that it says like, I'm an AI language model and I don't have access to all of the things. But, you know, people just they don't read. They do not read.

David Leary: [00:44:20] Going back to an old prediction I made, I think I missed it by like two years. I said, you know, pretty soon other companies will be in our space. And my prediction was somebody like Netflix, because Netflix built their own payroll software for movie production. And well, it's kind of happened. Now there's a company called Made for Net and it's a warehouse management system, like an ERP level tool for like omnichannel warehouse inventory, labor, shipping, last mile delivery, all of that. You know, their customers were Ikea, Valvoline, DHL, Uber, you know, well, Ikea just bought them. So now Ikea owns a SaaS app.

Blake Oliver: [00:44:54] So what does it do?

David Leary: [00:44:56] It's a warehouse management system. And they bought it because Ikea apparently is planning on this big omnichannel expansion in the US, their largest expansion in four decades in the US market. But they're still going to run the app and let their current customers use it. So they're now.

Blake Oliver: [00:45:14] The software company.

David Leary: [00:45:15] Saastr player Ikea is.

Blake Oliver: [00:45:17] Amazing. Well, I saw a story in MIT Technology Review about a big development with AI and Google's DeepMind. Google's DeepMind has developed an AI system that can create its own algorithms. That's a little scary. That sounds like AI becoming, you know, could become sentient, but not yet. What it's doing right now is using a form of machine learning called reinforcement learning to create algorithms that are more efficient than those created by humans. And they're using it to perfect and improve sorting algorithms that are at the foundation of computer programing. So, you know, I'm not a programmer. I don't know computer science very well, but I do know that. A lot of the foundation of computer science and programing is sorting numbers and comparing them to each other. Like, is this number bigger or smaller than this number? And sorting them like that's how that's how we create create code, really, that's the foundation of code is just comparing numbers to each other. And so what they've done is they've used this, they've used this AI to create algorithms to do sorting that we thought could not be could not be made any more efficient. And the AI figured out how to do it more efficiently and. For instance, they can speed up sorting list items 70% faster. And what that means is that like the the thing that these processors are doing at the fundamental level can get 70% faster. So we can we can continue to improve speeds of processing without because we're we're approaching the limit of silicon and light, the speed of light. So if we get the algorithm more efficient, we can continue to make faster processors that.

David Leary: [00:47:06] Moore's Law where they just keeps doubling.

Blake Oliver: [00:47:08] Right, Right. This is the way that we get Moore's Law to continue. And I just thought that was amazing. And, you know, these are these are things that we've been working on for 50 years, like 50 year old record in computer science just got broken by a faster way to do matrix multiplication, a core problem in computing that affects thousands of everyday computer tasks. So that's pretty cool. Any more tech news from you?

David Leary: [00:47:33] David Not anything that's yeah, you have some articles, but I don't think you.

Blake Oliver: [00:47:38] Think nothing that you're too excited about.

David Leary: [00:47:40] No, you know what I mean? Like you look at it, look at it, look at it. I'm like, Yeah, it's not worth opening my mouth about so we can move on.

Blake Oliver: [00:47:45] I got one more before we talk about PwC. Crypto scams are five times as costly as other cyber crimes, according to a study. So the typical internet crime costs $16,000. Your cryptocurrency related scams. The average loss is $86,000. They did this by analyzing data from the FBI. So I think it just why is this? Why does this happen? It's because it's so easy to do cryptocurrency scams. That's the that's the thing, right? You can't reverse the transactions. There's no protections in place for the people who have cryptocurrency, Right. When there's bank fraud, you can catch it, you can reverse it, but not with crypto. So this is a problem the crypto has to overcome. All right, let's talk about PwC. So we haven't talked about it and it's been going on for weeks now. So I asked ChatGPT to write me a timeline of events and I did click through on the citations. So I think it's pretty accurate. David Have you been following what's going on with PwC Australia?

David Leary: [00:48:49] I feel like there's just for the last 4 or 5 years there's just a mess of Australia accounting things anyways, like their governing body has like. They were taking the members fun. It'd be like the president spending the AICPA membership funds on other stuff. And when I say other stuff, like really bad stuff, like like.

Blake Oliver: [00:49:09] You say they were. They were what, improperly using funds? Yes, because that's not the story. I saw.

David Leary: [00:49:14] This.

Blake Oliver: [00:49:15] Not not this, not.

David Leary: [00:49:16] This isn't to do with the PwC, but I mean in general, like Australia's had some major they've had scandals, accounting related scandals over the last 4 or 5 years. Major, major and not just the.

Blake Oliver: [00:49:26] Kpmg big enough cheating scandal.

David Leary: [00:49:28] Yeah, the cheating scandal. Like not not. And when I say like major scandals, this isn't like only accounting people talk about this is like major news stories in Australia, I guess some of these scandals.

Blake Oliver: [00:49:38] So here's the summary for those who haven't been following and this has been making nightly news, according to Heather Smith, Down, down Under, like like can you imagine, like if PwC had a scandal like this in the US? I mean, I guess it would be like Enron. That's the equivalent. Last thing I can remember that made major nightly News. So earlier this year, the former head of international tax for PwC Australia, Peter John Collins, was deregistered for sharing confidential government briefings on new tax. Pwc had been the federal government's consulting firm of choice, so PwC was consulting with the Australian Government on how to reduce tax avoidance by multinational companies. And PwC's head of international tax was taking that information and using it to help their clients who were looking to avoid tax. Right. So big. No, No. Yeah. Using one client's information to help another client, especially the government. So they were using this confidential government information to benefit their own bottom line, leading to a scandal. On May 18th, the Department of Finance was criticized for entering into a new contract with PwC, even as the scandal was unfolding. And on the same day, PwC's global bosses seized long term oversight of its Australian businesses following the local team's involvement in the tax leak scandal.

Blake Oliver: [00:51:02] So Global BWC took over by the end of May. Pwc Australia CEO Tom Seymour had resigned from the firm and nine partners had been directed to stand down pending the outcome of an internal investigation. In response to the scandal, Several entities, including Australia's largest pension fund and the Reserve Bank of Australia, have frozen future contracts with PwC. Pwc Australia is now subject to multiple investigations, including a potential criminal investigation. They are. They are in big trouble. That's that's what that means to me. So how does how does something like this happen? Right? How it's just it's the definition of unethical, right? And CPAs are supposed to be like the most ethical profession like that. That is like one of our core values is ethics. Right. And independence and integrity. And then you get scandals like this which talk about an image problem. What do you think young accountants in Australia think about the accounting profession when this is on the news every day? Like it's not a good look.

David Leary: [00:52:10] And so even the bad stories, like I said, and maybe Heather Smith needs to give us a recap of the last five years summary of accounting scandals. But like the bad, bad ones, like I'm trying to Google this because I don't want I don't want to say these things unless I know for sure or I have a little bit of. Well, CPA Australia. Maybe this is the one. Yeah. So they had major 2018 2017. Yeah. Cpa Australia is a national scandal.

Blake Oliver: [00:52:39] Yeah. It's been a few years of of not great news coming out of Australia, but this.

David Leary: [00:52:43] Is what I'm saying. Like how do you expect the ethics to occur in PwC if the actual leadership of all accountants in Australia have had is completely unethical? So that's what I'm guess I'm coming from. It's a problem.

Blake Oliver: [00:52:56] It's a it's a problem all the way at the top, right? Or you could say that the rot goes all the way to the top and you can't fix it with ethics training. It's all financial incentives. Like they stood to make a lot of money from using this information that they should have kept confidential to help their other clients. And money trumps everything in the end, right? You give people the wrong incentive and they'll they'll figure out a way to rationalize their behavior. I mean, that's part of the fraud triangle is rationalization, right? It's what means motive and rationalization. I listen to enough. Oh, my fraud that I should know the answer to that. But yeah, they do it. And you try to combat it with, you know, ethics training and and tests and all that, and then they go and cheat on the tests. So, you know, I think if if we want to like, resolve our image problem as an accounting profession, we got to deal with like the fundamental conflicts of interest that we've got in the profession that we've set up in the way that our firms are structured and the way that we are regulated.

Blake Oliver: [00:54:01] You know, I talk frequently about the fundamental conflict of interest that we have in the audit and the way that auditors are compensated by their clients. And so they have a disincentive to find fraud and to find problems and to just let clients pass audits. So, I mean, we had a story recently about how partners who find internal control deficiencies are punished by their firms because it creates a problem with the client. I mean, that's the that's what's implied. We don't know why they're punished. But why do you think? Right. So, I mean, these are big issues that. If you want to fix the image problem, you got to fix what's going on underneath. And I don't think there's enough interest at the top of our profession in actually solving those core problems that we know are there that everybody who has worked in public accounting, everybody who watches the news, sees and and it's like our leadership is just ignoring it and pretending it's not there because they don't want to.

David Leary: [00:54:57] Admit those sessions of like there's no track of accounting is most uncomfortable discussions. And you can take you could take part on the mental health discussion, the ethics discussion, the audit conflict discussion. But none of those sessions exist.

Blake Oliver: [00:55:12] No, I mean, like that's the thing we need to address as a profession, like like the toxic workplace problem. Like not every firm, but a lot of firms, I would say their workplace is unhealthy and the hours that people are asked to work is unhealthy. It's bad for you. It really is physically and mentally bad for you. And just because somebody is not working in a factory and they're working in front of a computer doesn't mean it's okay to work them more than 40 hours a week. And we have to address that as a profession, making work life balance, a thing, making I mean, just making like. Unpaid overtime, like addressing unpaid overtime is a problem in our profession, should be something that's at the top of the list because we know that is what is driving a lot of young people out of the profession. But nobody wants to talk about that. I didn't hear a word about that at Engage and I would love to help make that discussion happen. We talk about it on the show and we know that it resonates because our listeners say it does with them. But you don't hear it. You don't hear it at the top. Yeah, we had a voice mail that I want to play before we go. David, I just.

David Leary: [00:56:22] Like So you're talking about this like. This we're not hearing, right? One of the things I picked up a tone and I feel like I've heard it in the other town halls as well. It's like, oh, to make you more competitive, right? Like you're going to have a better firm, you'll be more competitive, you're going to charge more and do all these things. And and I feel like it's being framed to be competitive against the other accounting firms. And really at the level and as an industry, it should be like accounting versus all other industries, like like helping accountants to beat each other up. Yeah, it doesn't make a lot of sense.

Blake Oliver: [00:56:57] What I would love is if the CPA advocated to. Overturn the exemption for staff accountants for overtime like they should get paid overtime. It's crazy that interns get paid overtime, but staff accountants don't. And if staff accountants got paid overtime, then, you know, maybe the firms would think twice about working them 60 to 70 hours a week. At least there would be a financial correlation to it, and at least they'd feel like they're getting paid for it. I mean, it's just it's not right. It's and we've normalized unhealthy workplaces in accounting for 100 years, and we need to undo that. We need to fix that. If we want to retain young people in the profession, we need to acknowledge it's a problem. We got a voicemail a few weeks ago that I want to play because I keep forgetting to play it and we got time. So here it goes.

Speaker4: [00:57:53] Hey, David and Blake. This is from Cruz Consulting. Hey, we're going to let you know, listen to this. Of all your podcasts and I always highly recommend everyone on my team listen to your podcast. Love the content. Keep up the great work and the great content. Appreciate it. Catch up. Have a great day. Bye bye.

Blake Oliver: [00:58:12] Thanks so much for the kind words. We really appreciate it. If you want to leave us a voicemail, you can send that to us as a voice. Memo to cloudaccountingpodcast.com at Earmark App.com. That's Cloudaccountingpodcast.com earmark.com. And you can send us your thoughts. We will take a listen. And we might even play it on the air.

David Leary: [00:58:34] It's all the news I have it's worth.

Speaker3: [00:58:35] That's a wrap this week.

Blake Oliver: [00:58:36] Thanks, everyone, who joined us live. As usual, you can follow us on YouTube. Do subscribe and you'll get notified when we get live. Go live. You can chat with us. Let us know your thoughts and we will see you all again next week.

Speaker3: [00:58:48] Bye, everybody.

David Leary: [00:58:49] I'll see you in two hours when we do our taxes.

Blake Oliver: [00:58:52] I'm looking forward to it. Let's hope we can get it done. Bye, everyone.