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[00:00:18] Episode Preview
David Leary: These companies were involved. They made a lot of money off this.
Blake Oliver: And you got to think, they had to know something was up.
David Leary: And this is the problem of the grain is audit not being separated. These companies are supposed to be there to protect the investors, and they're there, just making money; they're taking the investor's money, arguably.
Blake Oliver: The auditors, if they had done what was right, ethically, morally, the auditors would have said, rather than just not issuing an audit opinion, they would have said to the investors, “Hey guys, you're at risk here.” I mean, they would have done something. That's what they should do. I mean, I'm not saying that they have a legal obligation, but isn’t that what we expect auditors to do? Protect investors. But they don't want to do that, because they can make all this money from the consulting. This is the fundamental conflict of interest, of having consulting and audit in the same firm. And I think that's what Francine is trying to point out here, right, that these auditors, these audit firms were involved the whole time.
[00:01:12] On pay Bumper
David Leary: Coming to you weekly from the on-pay recording studio, this is The Cloud Accounting Podcast.
Blake Oliver: Today is Saturday, January 8th. I'm Blake Oliver
David Leary: And I'm David Leary. Blake, I'm doing my best to start out 2022 without baggage for 2021. My QuickBooks is all up to date for 2021; all reconciled, perfect. Perfect books.
Blake Oliver: Congratulations. Well done. I cannot say the same.
[00:01:47] A new reconciliation issue?
David Leary: It just took a very long time between broken bank feeds, and then but now, I discovered a new issue that everybody should be aware of it. Apps we use for the podcast, Transistor, Zencastr. I think about six or seven apps I use, SAS apps, they use Stripe for their monthly recurring charge for the app, the subscription. Stripe used to just send an email that they received the payment, and that was fine. You could forward it to auto entry or decks, and they would read the email and stick it in my QuickBooks.
Well, now, Stripe sends a PDF attached. But they don't send one PDF, they send two PDFs. They send an invoice PDF, and then something that looks exactly like it that they call the receipt PDF.
Blake Oliver: Oh.
David Leary: So, if you send that to AutoEntry and Dext, they shove two transactions into QuickBooks. So, this started probably in October or November, but it was making me crazy. I'm like, “Where's this coming from?” And then sometimes, it's hard to track this down. It’s like, “Is this from a bank feed? Is this from here? Where'd this come from?” But that's the cause of it. So, if you- the workaround would be this. If you get an email, before you forward it to Dext or AutoEntry, delete the invoice one.
Unless you want some put in as a bill, [INAUDIBLE] part, but you don't want to send both docs. Now, I think Dext and AutoEntry price, you'd be aware and try to fix this. It's almost like a win, a step forward win, ‘cause it's like, “Great. Companies are sending the PDF,” which is great. It makes life perfect because that carries through the system, and attaches, right, back to QuickBooks. But if you send two of them, that doesn't help anybody.
[00:03:18] A firm automation issue
Blake Oliver: I'm glad you brought this up because it illustrates a problem with automation in firms, is stuff's always changing So, it's always breaking. You Can't just set it up once and expect it to work forever. This is why it's good to have somebody dedicated in the firm that is handling this stuff, that can fix it.
David Leary: Yeah, because you'll find it eventually when you reconcile. But then how do you stay on top of it?
Blake Oliver: It's months past when that happens sometimes.
David Leary: Yeah, and it's a nightmare, because you're clicking and just a lot of hunting and pecking to fix it. How do you detect that earlier on? That, I don't know. This is why bookkeepers and accountants will always have jobs.
[00:03:56] Biscuit tax
Blake Oliver: On a completely unrelated note, I learned something about taxes over the holidays. Somebody gave us shortbread cookies for Christmas.
David Leary: Gave us, like me and you?
Blake Oliver: Me and my family.
David Leary: Oh, okay.
Blake Oliver: Somebody gave us shortbread cookies as a present. And these are treats that come from Scotland, traditionally; the Scots invented it. And shortbread is a very simple recipe. It is a cookie, or a biscuit, as they like to call it, that has flour, butter, and sugar. That's it.
David Leary: Do these come in that nice metal tin? That type of a-?
Blake Oliver: Yeah. It's great to have with tea or coffee, or whatever. And I love them. And I was wondering, why is it called shortbread? So, what did I do? I headed over to Google and I said, “Why is it called shortbread?” I learned that shortbread cookies got that name because Scottish bakers were fighting to prevent shortbread from being classified as a biscuit, or what we call a cookie, to avoid paying a government tax on biscuits. So, they called them shortbreads, and they got taxed like bread, which is preferable. And to this day, in the UK tax code, shortbread is taxed as a flour confection, a baked good, rather than as a common biscuit.
David Leary: Wow. Everything's a tax story.
Blake Oliver: And of course, it is tax season. So, we've got lots of articles on the accounting news sites, all about how to prepare for tax season, how to get ready. I noticed a ton on the Great Resignation, or at least, multiple headlines on the Great Resignation. That is a painful topic for many firms, because well, if you had a bunch of staff resign in December, odds are you're not recruiting people to replace them in January.
It's pretty much too late at this point. The barbarians are at the gate, your firm is on the city walls, ready defend itself. And if you're getting reinforcements, they're not getting to you in time; that's not happening So, it's funny to see these articles on the Great Resignation, because first of all, it's too late. But also, I feel like they miss the point. There's one in Accounting Today; accounting firms face the Great Resignation.
David Leary: They already are, right? It's almost like, is another wave going to start and happen?
Blake Oliver: Yeah. I mean, it's been happening since the pandemic started, and it hasn't gotten better. If anything, it's gotten potentially worse. So, what is causing the Great Resignation? Let's think about this.
David Leary: Specifically in the accounting industry, or just overall?
Blake Oliver: Let's focus on accounting. I mean, Great Resignation is something that's happening all over, in a lot of spaces. But let's just talk about in accounting.
[00:06:37] The Not-So-Great Resignation ...
Blake Oliver: What is causing the Great Resignation? Microsoft did a 2021 work trend index survey that found that 41 percent of the global workforce is likely to consider leaving their current employer within the next year. And 49 percent, half, just under half, plan to make a major career change. So, this is also affecting us in accounting. Lots of people are thinking about making a change. Accounting firm turnover has been 20 percent annually for quite a while, and Great Resignation is making it worse.
I just feel like in these articles where people are interviewed, they're focusing on stuff that, I don't know if it really is the reason. So, for instance, KPMG was cited; Kathy Shallom, KPMG executive director of university talent acquisition. So, this is the person who is responsible for recruiting new hires into KPMG from college, says, when it comes to fighting the Great Resignation, they're going to maximize flexibility, quote, “As we move toward a more hybrid way of working, we will be continuing to look at ways to be more flexible in geographic placement of our hires.
This is a great way to be able to expand our access to high-quality talent. We will also be merging the best practices we've learned while recruiting virtually with in-person engagement activities, to maximize the candidate experience. The most important tactic is creating an adaptable and flexible strategy that can meet the unique needs of candidates, by offering a suite of virtual and in-person options.
David Leary: So, they're saying that improving the interview process is actually going to make people; that's going to solve their problem.
Blake Oliver: Yeah. Or hiring people remotely; anywhere. And I'm thinking to myself, “Well, we've been working remotely for years now; two years.” And that hasn't stopped the resignations. So, that can't be it alone. Molly Willinger, human resources manager, BeachFleischman, she was quoted in Accounting Today saying, “Our firm leaders communicate and build relationships with staff members to help them feel included and connected, particularly, when it comes to our remote staff.
We encourage our staff to take time off from work possible to recharge. For example, we decided firm the entire week of Christmas this year so our could take a break, spend time with friends and family, and enjoy the holidays.” I mean, to me, helping staff feel connected, yeah, that's important and stuff. And closing your office over Christmas, I mean, that's great. I mean, I really feel like that should just be-
David Leary: That's just table [CROSSTALK].
Blake Oliver: Everybody should do that. They'd be like, I don't think that's the reason that accountants are quitting. “Be a great place to work,” Jeff Phillips quoted in Accounting Today. “If firms practice modern flexible work arrangements, embrace remote work, and provide great places to work, while paying a competitive market salary, people will stay.” So, he actually hits on it a little bit; the competitive market salary. I mean, one of the big complaints is that, well, let me just get straight to it. I'll stop beating around the bush, right? People are working too many hours for not enough pay. That's it. It's not complicated.
David Leary: It’s crazy, because you think accountants and accounting firms, that’s where they would start from, the math.
Blake Oliver: Right. The simple numbers, not this loose, I don't know, feel-good human resources crap. They'd actually talk about what accountants care about, which is, how many hours am I working and how much am I getting paid, and what is my ROI on this-?
David Leary: Versus the external market.
Blake Oliver: Yeah. Versus going somewhere else. And if you just go to reddit.com/r/accounting, and read what people are saying, and what is bothering them, these young accountants, sometimes not young, people in staff positions, up to manager are typically, the folks who are on there. It's the crazy busy season hours.
[00:10:16] You weren't joking about busy season ...
Blake Oliver: And there was a post that I just have to share with our audience. It's one of the top posts on Reddit this week. The headline is, “You guys weren't joking about busy season. New hire here. Just checked my schedule, and it says I'm booked 55 hours a week for the next few months. Do they actually expect us to work 11 hours per day for the next 12 weeks?
Or this just a recommendation for the overachievers? If it's normal, then why don't they just hire more people so we don't need to work these crazy hours? How do your brains even function after staring at a computer for eight plus hours a day? Do Big Fours have company-sponsored physicians who prescribe everyone Adderall? If this job were a journal entry, I feel like I've just debited an investment in my career, and credited all of my time, friends, and family. But is it worth it?”
David Leary: What's interesting about our industry, or the accounting industry, for people that are feeling like that, and they start doing the math, and they start weighing options, there's this very viable option for people to just start their own firm, because it's relatively low risk and you don't have a lot of expenditures to start a firm.
You need a laptop, and Starbucks, and a Li-Fi, and you could start your own firm. Versus if, let's say, you were a chef at a restaurant, and you want to leave, you need $400,000 capital to buy the restaurant, to open a restaurant. The options aren't there, but in our industry, I think arguably, maybe the resignation is going to be even greater, because it's easy to quit. There's not a lot of risk in quitting.
Blake Oliver: Right. Well, and you can just go out and get a job and-
David Leary: You just go back, right? Somebody else will hire you, different firm.
Blake Oliver: The chatter on Reddit is not about going out and starting your own firm for these folks, because they don't have enough experience yet. I mean, I'm just hypothesizing.
David Leary: Especially if they've only been doing audit tax, then it's a little different, yeah.
Blake Oliver: So, what they're talking about is all the better opportunities in industry, because you can work-.
David Leary: Non-public.
Blake Oliver: You can work around 40 hours a week, I mean. So, during the close, you might work 50, but it's not 55. Oh, and by the way, the comments are hilarious on this post, because the experienced folks are like, “Oh, ignore that. You're not going to be working 55 hours a week, you're going to be working way more than 55 hours a week, because that's the minimum; that's your billable hours. You can expect to work 70 or 80.” I was actually thinking about this because I haven't actually tracked my hours in a while.
But I was like, “How many hours do I work?” Because I'm building a startup right now, and I'm doing consulting to pay for it. So, I'm working probably 50 hours a week, I would say. I can't even imagine being booked for 55, much less working 60, 70, 80. My eyes would fall out looking at the computer It's just not healthy. It's really bad for you. You'd spend zero time with your family, and you’d get no exercise, and you have no social life. You can't do that for three months, every year, and not be a damaged person at the end of it. It should be illegal. That should be a workplace health violation. I'm surprised that OSHA doesn't have rules about this.
David Leary: Well, I think we brought this up about the Amazon workers at the warehouse in California, with subcontractors and the amount of hours. I think we talked about this a little bit. And it led back to, is this going to apply to accounting firms too?
Blake Oliver: Yeah, because California was considering legislation targeting Amazon. I don’t know if it passed about work hours, and bathroom breaks, and stuff like that. The joke was, “Well, this should apply to accounting too, right?” Because it's the same oppressive work conditions. It's just not physical labor, it's mental. But even sitting in a chair for that long every day is just abusive. But the whole thing is because the partner model in an accounting firm is designed to incentivize the partners to do this to their staff.
So, the way you make money is you hire as few staff as possible, and you give them as many hours as possible. And that's how you make the most profit in the short run. It's not good long-term, but as long as you can fill the seats with brand-new staff accountants who don't know any better, you can make a lot of money. And it would take a sacrifice, and pay for these partners to not do that. And of course, the people that think this whole system is messed up are the ones who leave. So, the only people who stay and become partners are the ones who bought into the system. So, it just perpetuates itself. So, until the supply dries up, it's going to continue.
David Leary: But the universities are set up to pump out that new labor. Every year, there’s thousands, and thousands, and thousands of the new labor to go through the cycle.
Blake Oliver: And if you ask me, these programs are complicit in tricking accountants, or not telling them the truth about what this is going to be like. Our job, I think, is to educate people. So, if you are a student go on Reddit, look at the accounting sub-Reddit, and decide for yourself, is this really worth it? Read the comments, talk to people who are actually working at these firms, and working these crazy hours, and decide-
David Leary: No, talk to the people that no longer- you're going to come across people that are like, “Oh, yeah. I started my career at Big Four, and I was there-they got it on their LinkedIn profile. They were there two years, and then find out why.
Blake Oliver: Well, and actually, talking to the people who are there is a bad idea, sometimes, because there's this cult-like mentality. And this is actually one of the reasons I think why the model's starting to break up, because when everybody's in the office together, working crazy hours, it doesn't seem so bad. Actually, it can be fun. There's a positive feeling you get from working really hard with people that you work with. and if you don't have a social life, you don't have a family life, and work is the only thing that matters to you, it becomes easy. It's like a cult.
David Leary: It's very like a lot of tech companies which are going through a new change, that whole pro-culture, where you never leave, you do your laundry at work, you sleep at work, you play all your games and eat your food at work. Yeah, you're right. It turns into that culture slash cult.
Blake Oliver: You can't do it remotely. You can't build a cult remotely. So, the whole- the model is going to fall apart, I think, potentially; it's starting to. I mean, maybe it won't fall apart. It will exist, but it's not going to dominate. There will be other pathways for people. And that will lead to, I think, the improvement in our profession. It'll make the profession better, because we'll stop kicking out people or people will stop self-selecting out of the accounting profession, because they think this whole thing is messed up.
There will be ways to be an accountant and enjoy the profession. And I love Accounting. I really, honestly, love Accounting, but I think that the profession, the job, is just horrible because of the way it's set up. Not the job itself, not the work, it's the job that's the problem in many cases, because it's just abusive.
[00:16:47] You're so punny ...
David Leary: Well, there are some ways to make it fun. I have an article; it's the 50 accounting puns.
Blake Oliver: So, you’re going to tell me 50 accounting puns now?
David Leary: I don't have to tell you all of them.
Blake Oliver: Am I going to die from listening to these?
David Leary: I’ll hit you with a couple.
Blake Oliver: How about after every story, you tell me one? Wait, wait, where did you find this, by the way?
David Leary: This is, believe it or not, is in parade.com. Remember the old parade magazine that used to come in the Sunday newspaper?
Blake Oliver: I have never- I mean, I've heard of it, but I've never read Parade. Who reads The Parade?
David Leary: Really old people that still get this in the newspaper, I guess. I don’t know.
Blake Oliver: Tell me an accounting pun.
David Leary: An accountant's biggest workout is crunching numbers.
Blake Oliver: Oh man.
David Leary: Where do accountants live in? In tax shelters.
Blake Oliver: I like that one.
David Leary: Marijuana dispensaries all filed joint returns.
Blake Oliver: Oh. Stop.
David Leary: I'll stop, that's it. But we'll have this in the show notes, if you guys want to jump in and look at those, and tweet on top with some of your favorite ones.
Blake Oliver: I've been talking now for 15 minutes about the Great Resignation, and overwork, and hours. So, what else can we talk about?
David Leary: We can still talk about the Big Four, and we can talk about Theranos.
Blake Oliver: Theranos.
David Leary: Theranos, I always say it that way. Theranos, it doesn't matter, they're not around anymore. They're going away; she’s going to jail.
[00:17:55] Thank you to our sponsor, CAP
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Blake Oliver: Elizabeth Holmes.
David Leary: So, on Monday, she was found guilty of four of the charges. I think there was another seven she wasn't found guilty of. And just to rewind, she started a company when she was at Stanford, 2008, maybe a little earlier, to take a little drip of blood, smaller than the swab you get for your COVID test size, drip of blood, and put it in a machine, it's going to detect like a thousand diseases.
Blake Oliver: This magical blood testing technology- it was actually, 2003, I believe, when she founded Theranos, and she was only 19 at the time. So, she's one of those wunderkinds. or was, anyway.
[00:19:26] Elizabeth Holmes and her Big Four audit firm buddies
David Leary: This is on Substack. The title of the article is- and it's very clickbait-y, a little bit, but it's, Elizabeth Holmes and her Big Four audit firm buddies at Theranos.
Blake Oliver: And it's by Francine McKenna. Anyone who follows Francine McKenna knows she is not a fan Big Four auditors. She is like the reporter on the beat, trying to track down all of their misdeeds. So, we know where this is going.
David Leary: The gist of it is, over and over again- and this has lots of examples from the testimony, a lot this testimony is a former corporate controller, Denise Yam.
Blake Oliver: She spent a long time with Theranos, too.
David Leary: Yes. So, she was there for a little bit. Some of the testimony talks about how bad it was. They had to call a bank and get them to allow the transfer to the payroll checking account, because they had no more money left. They basically, had a check for $1 million, wherever this check is from, and the bank- it takes 48 hours a lot of times, for a check to clear, right?
Blake Oliver: Uh huh.
David Leary: Well, they didn't have enough to cover payroll.
Blake Oliver: It sounds like they were skating along like this for a while, basically raising money from new investors to cover their costs.
David Leary: Yep. So, in the meantime, they danced with KPMG, they danced with EY. And a lot of times, they never actually ever finished their audits. They’d get in to a disagreement maybe, about the value of stock options. And then because of that, it would fall apart, and then it would never really issue the audit statements. They just never got around to getting it done.
David Leary: But these big firms continued to hang around, doing advising work.
Blake Oliver: Just to put some timeline on it, this goes way back. So, the company was founded in- I keep saying 2003, but then, I can't find the actual date. So, I hope it's 2003. Anyway, Ernst & Young was brought in as the auditor in 2006. So, when Theranos was really young, and that was when Denise Yam was hired as accountant, or controller, or whatever her role was at that time.
David Leary: Well, and back in 2003, so, when she started, for a little while, they did have a CFO for the first couple of years. But then, they didn't have one, a CFO or auditor, for the longest time.
They only had it for the first two or three years, and then they just ran without it. Probably because somebody probably was saying, “Hey, the numbers aren't working here.”
Blake Oliver: So, what's weird about is, EY came in as the auditor in 2006, and they gave opinion on Theranos financial statements for 2006, 2007, 2008. But then after that, no audits. Why were there no audits?
David Leary: Because then it jumps to 2017, and they, Fortress Investment Group, so, their division of SoftBank, they demanded an auditor before they gave them a loan of $100 million. But what they did is, they went ahead in December of 2017, gave them $65 million right away, $65 million, holding back $35 million until the audit was done. And then they brought in a boutique audit firm that specialized in biotech, called OUM & Co. LLP. They quickly concluded that didn't have enough cash to commercialize this, even if it got the extra $35 million from Fortress.
Blake Oliver: There was no way they could do it.
David Leary: By that time, I think by 2017, 2018, I think the wheels were already falling off publicly. It just took a long time to become a guilty verdict.
Blake Oliver: Reading in between the lines, here's what happened. EY comes in 2006, 2007, issues opinions. That's when Theranos is young and still has a future. Then they hire KPMG to replace EY in 2009. You always wonder when an auditor gets switched out that soon, what happened? Why did EY stop doing the audits? Now, KPMG comes in, 2009, never issues any audit opinions. Why no audit opinions? Well, probably, because it wasn't going to be good, but they stuck around, like you said. All of these companies, all of these Big Four consultants came in and still worked with Theranos. So, they probably knew what was going on, to some extent, and they didn't do anything about it.
David Leary: PWC, I guess, was working with a law firm in some of this. And PWC spent 10,000 billable hours collecting texts and email messages from Holmes and her boyfriend at time, and the co-CEO, or I guess he was a COO.
Blake Oliver: Was that during the lawsuits?
David Leary: Yeah, just as the lawsuits started ramping up. And then PWC helped them wind down the operations. These companies were involved; they made a lot of money off this.
Blake Oliver: They made a lot of money off of Theranos, and you got to think, they had to know something was up.
David Leary: And this is the problem of the grain is of audit and not being separated. These companies are supposed to be there to protect the investors. And they're just making money. They're taking the investor's money, arguably.
Blake Oliver: The auditors, if they had done what was right, ethically, morally, the auditors would have said, rather than just not issuing an audit opinion, they would have said to the investors, “Hey guys, you're at risk here.” I mean, they would have done something. That's what they should do. I mean, I'm not saying that they have a legal obligation, but isn’t that what we expect auditors to do? Protect investors. But they don't want to do that, because they can make all this money from the consulting. This is the fundamental conflict of interest, of having consulting and audit in the same firm. So, they just look the other way, make a bunch of money from consulting. And I think that's what Francine is trying to point out here, that these auditors, these audit firms were involved the whole time.
David Leary: Yeah, they're hanging around.
Blake Oliver: Now, there's another important point here, which is the crime that Holmes was found guilty of, was defrauding her investors. And we should point out that the investors did not ask for audited financial statements. Until that bank asked for them, no one asked.
David Leary: They were like, “Oh, well, so-and-so invested. So, it must be good.”
Blake Oliver: They were just investing based on good vibes, and Holmes’ charisma, and hope in the fact that other big investors were already in. You think, “Oh if these guys are in, then it must be a good company. I don't need to do due diligence.” Even some of the investors were afraid to do due diligence because they didn't want to piss off Theranos, because they wanted to be invited to invest more money in this amazing company that was going to be worth billions and billions.
David Leary: And not to just say EY and KPMG, as they were working, not saying they did the audit and saw the numbers were bad, and then bailed out of trying to issue a statement on it, I suspect they probably couldn't even get the numbers they wanted. It sounds like there was a lot of deception happening, but even then, if founders are being deceptive about their numbers, that should raise the flag. You should run the [INAUDIBLE], but you're right. It's interesting, because at the same time, I could see, just personalizing this, “If there they're going out of business anyways, the money's going to go be spent. Might as well spend it on my company.”
Blake Oliver: Like you said, I don't think or I think this is what you were going at, is there's not one group or entity or person that's responsible for this. I mean, obviously, Holmes is. But in terms of discovering it, it's just the way our system is set up, this sort of thing can go- the system is broken. The fact that Theranos was able to operate for this long, while basically, being a fraud, points to a hole in our system. And I think that one way we could plug it would be by separating audit from everything else. And the only people who can do audits are in their own firm, and they are completely separate, they have no financial interest in consulting, or tax, or anything.
And that would be a way to actually protect the public; get rid of these conflicts of interest. And maybe, the accounting profession is ready for this, because it's not like audit’s a huge growth opportunity anyway, these days. Maybe they'd be happy to split off that into its own thing. But historically, they haven't wanted to because audit is a great way to get consulting work. When you're the auditor, it's really easy to upsell your client on consulting. And I think we need to break that link. I'm glad you brought that story up because it's just messed up.
David Leary: How long it went on.
Blake Oliver: Yeah, how long it went on. But also, shame on the investors.
[00:27:15] 18 years, a billion dollars, and still nothing to show
David Leary: I have something else that's gone on for a very, very long time.
Blake Oliver: What's that?
David Leary: I think we've talked about this before, but another year, or two years have gone by. So, state of California has been building their own accounting system.
Blake Oliver: Oh no, it's back?
David Leary: It’s now going to 18th year. They’ve spent $1 billion, and it's still not done. And they've just had to extend it out again more, but they don't have the new timeline yet.
Blake Oliver: Basically, we're pouring more money into this. We don't know when it's going to be.
David Leary: Correct. So, they thought they were going to be able to have something delivered here, so compare the numbers and the data to its old legacy system, to make sure it's, “Okay, we can start rolling this out.” And it’s just still not done. So, it's called Fi$cal, dollar sign for the S. It started in 2005, the latest delay now, it's pushed out through December, 2022, and it's going to be another $6 million on the taxpayers.
Blake Oliver: This is never going to be done. And my question is this, what’s going to be done first? This, or the high-speed rail project?
David Leary: The high-speed rail, yes. Both big boondoggles. The crazy thing is, $1 billion, they could have just bought Sage Intacct, or they could have bought- at the time. They could just buy a huge ERP company. And then $1 billion, this is bananas.
Blake Oliver: We're going to be talking about this for a few more years, I bet.
David Leary: At what point do you just pull the plug? If you're able to run an [INAUDIBLE] system for the last 18 years, can’t you just run that for 18 more?
Blake Oliver: Nobody wants to own this failure. So, no politician wants to pull the plug. That's why. Because if you pull the plug, then people are going to say, “Look at all the money we wasted.” Whereas, if you just put a little more in, all you get is an article in The Sacramento bee every year on January 5th.
David Leary: That's true.
Blake Oliver: So messed up.
[00:28:56] Thank you to our sponsor, Earmark
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[00:29:55] Merry Christmas from Santander!
Blake Oliver: Well, here's something else that's messed up. Thousands of people received a surprise gift on Christmas day this year when European bank, Santander, accidentally deposited 130 Pounds across 75,000 transactions into people's bank accounts. That's the equivalent of $176 million US.
David Leary: So, this was an on-purpose event? A marketing deal, or it was an accident?
Blake Oliver: This was a total accident. Payments from 2,000 business accounts in the UK were processed twice, meaning some employees saw their wages double, while suppliers also got more than they were expecting. Some glitch in you know their version of ACH, or whatever. And this was reported in CNBC. Now, Santander is using a mechanism to pull back that money. So, that's going to, of course, cause people to overdraft, or whatever. They thought, “Oh, I got a bonus.” No, you didn't get a bonus. You got a [CROSSTALK].
David Leary: We went through this with the MyPayrollHR thing. They tried to re-pull it out, it just creates this domino; does not sound like a good mess.
Blake Oliver: It's going to create some havoc there.
[00:31:01] Latest on the Kronos outage
Blake Oliver: Another fiasco is the ongoing saga of the Kronos hack, that timekeeping payroll. The new information is that apparently, the backups were hit by the ransomware attack, or at least, the company's ability to communicate with the backups. They're still down. The company has promised, this is as of an article on- let me check the date here.
David Leary: Is this an article in The Stack?
Blake Oliver: Yeah. But how can there not be a date on this? it’s so irresponsible.
David Leary: Because evergreen. Blog posts like to be evergreen.
Blake Oliver: Well, there's a statement from the company in this article, which I picked up on this week. So, I hope its recent. Quote, “Between January 3rd and January 7th, we can give you a better sense of your own individual restoration timeline. You do not need to log a case or check in with anyone to find out if we know the specific date for your restoration yet, because we will proactively reach out to you.” So, they don't even have a date for people yet, as to when they're going to get restored.
David Leary: They call out how the company, UKG, who basically, is the parent company.
Blake Oliver: Ultimate Kronos Group.
David Leary: They talked about the robust backup policy, and all their white papers.
Blake Oliver: So, if you can't get to the backups, and you have to restore them all individually from tape or whatever, which is what it sounds like is happening, we don't know. So, the problem isn't that they don't have the data, it's just that it takes them so long to get back in action, because they have so many customers that have to all be restored individually. This is what happened with another hosting company we talked about. This is a big problem. How do you get back in action after a ransomware attack? Even if you have the backups, if it takes you a lot of time, it's just as bad.
David Leary: And what's happening now, is they're saying these attacks are increasingly disabling the backups, and attacking the backups as well, because it makes the negotiation. They have to come to the table and negotiate, and pay the ransom, because you have no backups. Unless you do offsite tape and they're in a safe somewhere, and they're not connected to the internet, that might be a way around it.
Blake Oliver: And just as a reminder, this is affecting some really big employers; the New York Metropolitan Transportation Authority, the City of Cleveland, the State of West Virginia, Oregon Department of Transportation, University of California system, Honolulu's EMS and Board of Water Supply, all sorts of local authorities, lots of government groups who've been affected by this.
David Leary: And they also said that some data was stolen; customer data. They admitted this, and they've notified- the list is pretty big- notified authorities in Australia, Belgium, Brazil, Canada, Hong Kong, India, Singapore, and New Zealand.
Blake Oliver: Wow.
David Leary: I mean, at this point, being January 1st, I can't imagine these companies aren't just bailing and moving on. I mean, it's huge. Because through the University of California, school system, that's 100,000 employees you got to move to a different payroll system.
Blake Oliver: Or process manually or- what a lot of these companies are doing, is they're just paying people and then saying, “We hope we got it, approximately. We're going to true this all up once we get our system back online.” How long is that going to take?
David Leary: When is the Big Four going to get involved in this? Offering these. These are good targets. They're desperate, they all have money, they have budgets. They come in and go for some of this play; come be the heroes. Maybe we need an accounting pun to transition out of that.
Blake Oliver: Give me an accounting pun.
David Leary: I paid high taxes on cow manure. It was heavy duty.
Blake Oliver: And with that, should we transition into app news? You know, David, that I talk a lot about how incentives and firms discourage staff from adopting new technology. That if you incentivize your staff to get lots of billable hours, they're not going to want to become more efficient, because it reduces their hours that they're billing. So, I'm against using that as a performance metric.
[00:34:29] Confessions of an ex-partner
Blake Oliver: Interesting article headline is Confessions of an Ex-Partner. This made me think about the partner side of the technology equation. This is by Mark Holman, who is a ex-partner, I guess Big Four, ex-Big Four. He's the president of accounting and consulting, and the chief strategy officer at Intapp. And he says that over a third of his 30-year career, he has been a non-CPA partner in both large and small consulting and accounting partnerships, including a Big Four firm, and large strategy, as well as boutique firms. So, this guy is really experienced.
He's developed and run his own book of business with relative autonomy. The takeaway from this article, and it says Confessions of an Ex-partner, one of the confessions that's interesting is, he says that as a partner, you have a disincentive where partners are often against adopting new technology because, quote, “It often rubbed against the partner's spirit of freedom, especially if the value of centralized-time relationship and risk management systems was not clearly defined. Partners were suspicious of a system that might increase monitoring, and decrease their ability to invest in, or accept the clients they wanted.
Their need to build and own relationships did not often align with sharing information about each call, each meeting, and time spent on each contact. It's not just the staff that have a disincentive in the traditional accounting for model to adopt technology. It's the partners too because they operate as little fiefdoms. And they don't want to share information with the other partners necessarily. They don't want to be held accountable.
David Leary: Then why are they part of this partnership model? None of this makes sense to me.
Blake Oliver: Well, because you don't want to be on your own, because then, you have to do all the business of managing a firm.
David Leary: But obviously, they want to be on their own, if they want to hide everything and control their own little- they’re building their own mini org.
Blake Oliver: To me, how I see a traditional firm is, it's a bunch of individual business owners, who each have their own book of business, that operate under a shared brand, and shared cost-sharing structure. So, we all have the same office and we split the expense. We have a shared pool of administrative resources, the same website, all these costs that would normally be prohibitive on your own, or difficult on your own. And you share that, and then you share- you refer clients to each other because you all have the same brand. You’re not really operating as a cohesive business that serves the customer in a modern business; that's a partnership. That's the traditional partnership when it- and it works, to some extent.
David Leary: You're not operating as a business. You're operating as a-
Blake Oliver: Partnership-
David Leary: Not a club, but a partnership that just shares expenses.
Blake Oliver: Under that model, the reason technology struggles with the partners is because- let's take CRM, for example. The customer relationship management system, which a lot of firms still don't even have, or they don't use properly. Well, one of the reasons might be because partners don't want to put all the information in about a contact, because they don't want to be held accountable for closing it. They don't want to be held accountable for the metrics, and the sales, and all that stuff.
They just want to do their own thing They want accountable to themselves. Technology, often, in a firm, when it comes to practice management software, creates transparency. So, you can see which partners are performing, and which aren't. well, the partners who aren't at the top, they don't want to be seen as being in the bottom of the partnership, in terms of performance. Just like staff don't want to be held accountable, partners don't want to be held accountable.
David Leary: That ties it in there.
Blake Oliver: So, I thought that was interesting. Something that I had not really considered before, because I've always focused on the staff, but this may actually be a bigger problem. A much bigger problem.
David Leary: You'll hear too from owners, and from leaders, and partners, like, “Oh, my staff is the ones resistant to technology.”
Blake Oliver: No, I think it's actually-
David Leary: They’re throwing the blame down the- kicking it down the hill.
Blake Oliver: They're scapegoating the staff. Partners, they have the control. They're the ones who deserve the blame.
David Leary: Really, this article really makes this pun ironic. It says accountant's offices are all glass because transparency is important.
Blake Oliver: Well, that doesn't make sense to me. Why is that a pun?
David Leary: I don't know why it's a pun. But it's number 45 of the 50. Maybe that’s why it's at the bottom of the list here, I don't know.
Blake Oliver: I feel like it's your turn to share.
[00:38:34] QuickBooks takes the Super Bowl stage
David Leary: I got app news. So, QuickBooks is going to actually run a Superbowl ad about QuickBooks.
Blake Oliver: Not about TurboTax?
David Leary: No. So, Intuit will do TurboTax ads. They've done the Intuit robot before. QuickBooks has sponsored a commercial for- do you remember Death Wish coffee? So, QuickBooks has paid for a to commercial before, but now it's actually going to be our commercial with QuickBooks in it during the Superbowl.
Blake Oliver: Well, and I assume it's going to be a QuickBooks Live commercial, right?
David Leary: Well, not entirely, because it's being- there's a new campaign they have, quote unquote, called early start. And apparently, it looks like Intuit’s on a March to really target brand-new business owners. For our listeners, how do you start digesting in your brain, how you could capitalize on this, the week after? Is it SEO? Is it a blog post? Do you embed the commercial? I don't know, but this is exciting, because I think this is a- I'm not sure people fully grasp, this is accounting software during the Superbowl.
It's a big deal. I think it's a massively big deal, and we should be excited about this. Now, even if it's QuickBooks Live, it doesn't matter. The fact that it's being put out there- and I think I saw something the other day, 75 of the top 100 TV events that happened last year were all NFL football games.
Blake Oliver: Wow.
David Leary: This is why Intuit sponsors the NFL, sponsors these games, because it's butts and seats, and it's eyeballs. But this is exciting. The ad’s not available, you can't watch it yet, but at least, it's going to be about QuickBooks, and not about some other product.
[00:40:03] Is PayPal taking a stab at Stablecoins?
Blake Oliver: Well, in the world of FinTech, PayPal is exploring the launch of its own Stablecoin as part of its cryptocurrency push, according to the company. Which confirmed the development, after evidence of the move was discovered inside its iPhone app. So, I guess somebody was poking around in the code and found that they were working on a Stablecoin. This is as reported in bloomberg.com. Stablecoins, by the way, are a cryptocurrency where the price of the cryptocurrency is tied to a real-world currency, like the US dollar. It attempts to allow you to get the benefits of using a cryptocurrency without the risks of volatility.
David Leary: That speculation, it’s gone.
Blake Oliver: Yeah. I am really bullish on the future of Stablecoins. I am a critic or a skeptic when it comes to cryptocurrencies in general, like Bitcoin, for instance. I'm not bullish on Bitcoin, but I am bullish on Stablecoins to completely change how we do banking, because it decentralizes finance, potentially. Also, a lot of risks with Stablecoins, too, because the Stablecoins are not regulated the same way that banks are.
And so, how do we ensure that the Stablecoin-issuing company actually has the reserves to back it? That's a big thing that the SEC needs to look at. Getting back to this PayPal thing, they're working on a Stablecoin. That could allow people to basically, transact in PayPal in their Stablecoin and avoid converting it into US dollars until they need it. That could enable quicker transfers of funds.
David Leary: This is what’s silly about this. If I have PayPal, and you had PayPal, and I moved mine from my bank account into PayPal, and I pay you, why do I need a coin? It doesn’t make sense to me. Why do I need it in this other medium first to move it?
Blake Oliver: That's a good question. I think-
David Leary: This would go for all of these types of things, right?
Blake Oliver: It's because the person receiving it, if it's a Stablecoin, can be using any crypto wallet. They don't have to be signed up for PayPal.
David Leary: Got you on that front.
Blake Oliver: So, this allows PayPal to extend its network beyond the PayPal app.
David Leary: Got it. That makes sense then.
[00:42:16] Thanks to our sponsor, Oh My Fraud
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[00:43:16] LinkedIn is taking on Zoom and Microsoft Teams
David Leary: LinkedIn is going to take on Zoom and Microsoft Teams with new audio and video platform events. I don't necessarily think the title of this is very good. I think they're really not- I don't think this is really them taking on the meetings, but it's more taking on the advance, fireside chats, online conferences. I think that's the merch they're on, but it's also weird too because Microsoft owns LinkedIn still, right?
Blake Oliver: Yeah.
David Leary: I don't know why it's not integrating more into Office, and that sort of thing.
Blake Oliver: Well, I saw this pop up, when I go on LinkedIn and there's that startup post widget in the middle, at the top. I see photo, video, and then event.
David Leary: And so, at first, it's going to be all audio only, similar to Clubhouse-
Blake Oliver: Oh, boy.
David Leary: Type events. So, that's going to be- and then eventually, later this month, there's going to be a beta, and then they'll have video versions available with that. they want it to be full end-to-end stack. So, if you want to do a fireside chat, you can set this up, and all the tools you need are right inside of LinkedIn. You don't have to get another, “Hey, I need this thing to capture the audio and stream it over here to LinkedIn, and this other tool to do this.” It’s just all straight, in theory, end-to-end, out of the box, on LinkedIn site.
Blake Oliver: Well, David, maybe we can do a live episode of The Cloud Accounting Podcast on LinkedIn. This seems like perfect for us, right?
David Leary: Maybe. Well, we'll see. We'll see.
Blake Oliver: Or we can do a bonus episode.
David Leary: We could do an experiment episode, and we can see how that goes. But yeah, it is definitely like Clubhouse, and my suspicion is, just like how it happened with Clubhouse, we'll probably just see a lot LinkedIn experts creating fireside chats about how to use the LinkedIn thing, or why you should use it. And it's just very circular.
Blake Oliver: Very meta.
[00:45:06] Results from a survey on tech, and tech adoption in accounting firms
Blake Oliver: Hey, here's a story in CPA Trendlines by friend of the show, Dani Shimamoto. He's working with the Ohio society of CPAs, and did a survey at a town hall with over 600 responses about technology, and technology adoption in accounting firms. I wanted to share some of the results with you. Here's a question, when it comes to accounting technology, how well is your team prepared to navigate the environment? 7 percent said, “What's accounting technology?” 32 percent, so, about a third, said, “We're just getting started.” 27 percent said, “Our team is well-versed.” 23 percent said, “We have a strategy, and are pursuing it.”
And only 11 percent said, “We are fully involved and advancing quickly.” So, a third to 40 percent, about, are either just getting started or have- I feel like that must be like a joke response, the what's accounting technology? But we'll lump them in with the we're just getting started group. Think about it this way. Four in 10 firms are yet to really move with accounting tech. So, there's a lot of opportunity still. That doesn't surprise me at all. It is exciting though that we're over the 50 percent hump. I feel like for a long time, it was less than 50 percent, when I looked at these kinds of surveys.
And now, more than half. We've passed this early- what is it, in the technology adoption curve, early majority, late majority? We're starting to see the late majority adopt tech in a meaningful way. Now, what technology tools are your organizations using? 53 percent, just over half, said they are using cloud accounting. Only 8 percent are using robotic process automation, 6 percent, artificial intelligence, cryptocurrency, 0.2 percent.
Nobody is using cryptocurrency, or hardly anybody. And 30 percent said, “None of these.” So, the third of people that are just getting started pretty much are not using any cloud accounting, RPA, AI or crypto. And 10 percent said, “Not sure.” Maybe that 10 percent is related to the 7 percent that said, “What's accounting technology?”
David Leary: But if you're using Excel, you're using accounting technology, right? Are we being a little harsh on this?
Blake Oliver: I think Excel is just so embedded in accounting that we don't even consider it tech anymore; I wouldn't. It's just table stakes. I mean, unless it's really that bad, and those people aren't even using Excel. I mean, I have heard crazy stories from some of our listeners about firms that are still doing it in paper, or businesses that are still doing paper ledgers. That is still a thing.
David Leary: That’s scary.
Blake Oliver: Just a few years ago, we got a client. The previous firm sent over the workpapers and they were in paper ledgers, big ass paper ledgers. I could not believe it. My staff accountant at the time was super excited to see these because she'd never seen them in her life. She was like, “Oh, so this is what I've heard of?”
David Leary: Is that it for app news?
[00:48:04] Ted Tech: Updating the home office
Blake Oliver: I’ve got one more. So, maybe it's time to upgrade your home office in January. What are some items you may want to consider? Ted Needleman over at Accounting Today highlighted a few of his favorite items that he's tested out in recent weeks.
So, if you're looking to upgrade your video conferencing setup, he suggested looking at the Poly Studio P21 Personal Meeting Display, which I have not even looked at yet. I'm going to type that in right now and look it up, because I too have been looking for one of these things; a dedicated screen for Zoom or for video conferencing, that I could potentially also use as a second monitor. Because I want something that I can-
David Leary: They have tablets that do this. They just don't have the head tracking, but they-
Blake Oliver: Our listeners may remember that a while ago, I pre-ordered a device that was going to be made by Zoom. It's like a dedicated Zoom device, like the kind you would have in your office, but for home. And they had promised it at an affordable price. Actually, it was the one where you could attach it to your TV, and turn your TV into a video conferencing setup.
And I just wanted that, because it'd be nice to sit in a chair and have a conversation with somebody on the TV, instead of at my desk; just a change of pace. And that never materialized. It fell apart for that project. So, I've been looking for something similar. Anyway, this Poly Studio P21, is that what I'm looking for? It's basically a secondary display that includes a built-in camera, microphone, speakers, and lighting. The lighting's neat. So, it has this wraparound lighting, like a hotel bathroom where you have the nice-
David Leary: Oh.
Blake Oliver: Lighting around the mirror. It connects via USB to your PC, or Mac, and works as a secondary display. But then you can also use it as your video conferencing setup. So, that's neat, rather than having to buy a separate webcam, speakers, lighting. You get it all in one; it's a personal meeting display. It's $815 though. These things are not cheap. Although it's a lot less than the $2,000 or $3,000 setups that I've been looking at, which I’m not willing to pay for.
David Leary: Jeez, you can get a decent Microsoft Surface Go tablet for that kind of money.
Blake Oliver: I know, but the problem with the tablets is the weird angle, looking up at your nose, and the webcam is not very good. But the problem with this is at this point, I might as well just buy another computer, and just use- buy an all-in-one computer and use that as my setup.
David Leary: I mean, that's what I've done here. But the podcast studio, I bought a small, little, dedicated computer, put it in the recording studio, a separate monitor, there's a web cam in here. It's just a whole separate set up. The real problem is it's the taking apart things, putting it back together is the nightmare. So, if you could build it and you have a dedicated space for it- and that's what's I guess the appeal of this, where it's all-in-one.
Blake Oliver: All-in-one, and it's guaranteed to work, and make you look good. For that price, I think I might actually consider it, the Poly Studio P21. Now, another suggestion that Ted at Accounting Today had is to look at getting a gaming monitor. You know what a gaming monitor is?
David Leary: Yes.
Blake Oliver: It's these super wide-screen curved displays. Monoprice has one that Ted recommends. The Monoprice 35-inch UWQHD Zero-G gaming monitor, and the resolution is 3440 by 1440 pixels. 3440 by 1440. I have exactly the same resolution on my monitor. It's not a gaming monitor, but it's the same wide screen thing. I highly recommend getting one of those. It's so much better than having two separate displays, because you can stretch out a spreadsheet across the whole thing, and you don't have the lines in the middle from the monitor. Love that.
David Leary: I think I saw at CS this week, some of the hot monitors now are- they're starting to market them at businesses, where it's the curved monitor but instead of putting it horizontal, you flip it so it’s porch vertical and it bends over your head. And so, instead of having your neck move left and right, you're going to look up and down.
Blake Oliver: So, I could see that working for certain folks, but as an accountant, I want the horizontal view, so I can stretch out my spreadsheet. What's nice about gaming, this is a nice perk. Gaming has improved the quality of headsets, of webcams; streaming has done this too. All of a sudden, we have all these microphones that are super cheap, that are super high quality. And the monitors have gotten really cheap too.
This kind of monitor used to cost $1,000. Now, it's down to $399 for this monitor, this Zero-G gaming monitor from Monoprice. And they put them on sale for sometimes, $329. So, that might be a good thing to upgrade. Also, a tablet that Ted recommends is the TAB Pro 5G. It's an Android tablet, and I'm a Apple person, so I would never get Android tablet. But David, you'll have to take a look at this, and tell me if you think the TCL TAB Pro 5G is a tablet worth our listeners checking out.
Ted also says that he loves the mophie 3-in-1 wireless charging stand for iPhone and Apple watch. I have one of these, I love it, it's great. It seems like a ridiculous thing to buy for your bedside table, or your office, or whatever, but it's just so nice to have it. And you can just put your iPhone or your phone on it magnetically, it charges it. Just looks so great. I recommend something like that. I mean, they're pricey, $139 for this, but you think about what you're getting.
You're getting charging for three different devices, and you're getting a stand. That's the splurge, but I think the thing to look at is, if you don't have a good widescreen monitor, get one of these gaming monitors. And then if anyone has one of these Poly Studio P21s, I want to know. Or something similar, if you like it better than just using a tablet or your computer for that sort of thing.
David Leary: It’s [INAUDIBLE], but I think the next tablet, if you're in the Android space, you want to get, is the one- they're starting to build them bigger now, 12-inch screens, decent sized, but then uses a separate monitor. You just plug it right in and it works the monitor. You don't have to get special software that you have run your PC on, on your tablet. You just plug it in. It's also an external monitor. So, it's a double duty, but it doesn't look like this one, does it?
Blake Oliver: The Poly Studio isn't a double duty.
David Leary: This tablet you told me to look at.
Blake Oliver: I think if you're going to get a tablet, get one that can do the secondary monitor thing too. That's what the- the iPads do that now with Macs, is you can use them as a secondary screen.
David Leary: You don't want to carry a tablet when you travel, and carry a second monitor, and your laptop. Hopefully, you get to take something out of your bag.
[00:54:23] The 2021 Controller Awards: Call for Applicants
Blake Oliver: Little small piece of news, not app-related. The Controllers Council has announced that they have opened up nominations for their second annual controller of the year award. So, if you think that you, or somebody you work with, or somebody you know, maybe a family member, is worthy of being the controller of the year, go ahead and check out this award.
You can nominate yourself, nominate. All you need to do is submit a bit of information and anonymously, add a brief summary, about 2021 financial performance, work experience, volunteer or philanthropic activities, and educational background. Following your submission, their team will screen the information using a proprietary algorithm to identify finalists by state.
David Leary: They see people in a room, chatting about the people that applied.
Blake Oliver: And they have a blue-chip panel of judges that will select the controller of the year by state, and ultimately, a national 2021 controller of the year. Winners will be announced in March, 2022, and all winners will receive a frame-quality certificate. Oh boy, another certificate to display on your office wall. The national 2021 controller of the year will receive- I think they forgot to update this. Is this the 2021 or- yeah, I guess for last year. The national controller of the year will receive a gold-plated and engraved statuette trophy manufactured by the makers of the Oscar Awards. Ooh. You could have an Oscar-like trophy on your bookshelf. That is fantastic.
David Leary: We should make trophies for each other. Cloud Accounting Podcast trophies.
Blake Oliver: Let's nominate each other for this.
David Leary: I have something that- metaverse-related news.
[00:55:53] Controller and Corporate Accounting/Finance Statistics
Blake Oliver: Well, before you do that, can I just say one more thing about this controller thing?
David Leary: Yeah.
Blake Oliver: Because the Controllers Council also released an infographic that I thought was interesting that's worth looking at. I don't know if people realize just how dominant the job title controller is the world, and in our country. If you're an accountant, it's basically the spot in most companies. If you just want to run the accounting team and you don't want to do finance, controller. The top accounting job, often.
Sometimes, they have a chief accounting officer, but that's very rare, and it dominates among leader titles, director and above in accounting and finance. 62 percent of titles or people with titles are controllers, in the US. That's 250,000. Compare that to CFOs, there's only 84,000 of them. So, 62 percent of these leadership roles are controllers. Globally though, it's more, actually. There are fewer CFOs, globally, and fewer VPs of finance. 76 percent of these titles are controllers, globally. So, that's interesting.
We have fewer controllers here in the US. I wonder if that's because we have more CFOs because more companies have their headquarters here. And so, your CFO is going to be where the headquarters is, and then you have your controllers in all the different subsidiaries around the world. That might be it. In the US, there are 2.9 controllers for every CFO, and globally, there are 5.4 controllers for every CFO.
David Leary: When you think about titles at companies, of all the different jobs, I know yes, we have chief, but controller is very- there's no question. There's no grayness in the title.
Blake Oliver: Well, I think a lot of people not in accounting and finance may not really know what a controller does.
David Leary: They don't know what they do but-
Blake Oliver: But it sounds fancy, right? It sounds like-
David Leary: It's very deliberate, it's not wishy-washy.
Blake Oliver: Well, it doesn't sound fancy. It sounds important.
David Leary: And very black and white, right?
Blake Oliver: Yeah.
David Leary: It’s like, “They’re the controller.” It's almost like there's not a lot of wishy-washy around that.
Blake Oliver: This person is in charge.
David Leary: That's exactly it. Actually, I think it's more- it's stronger than chief.
Blake Oliver: So, that's all the tech I got.
[00:57:53] Another firm's buying up that virtual real estate
David Leary: Hopefully not, but you might have to create a musical interlude for the metaverse, apparently, because again, here we go. Another accounting firm purchased a three-story building in the metaverse.
Blake Oliver: Big Four?
David Leary: This is a Prager Metis International. They’re a New York-based accounting firm. They opened a virtual three-story property on a site it bought for $35,000 in late December. The firm, which operates 23 physical offices in US, Europe, and Asia made its purchase in Decentraland in partnership with Banquet LLC, a fund that manages blockchain ventures. They have a picture of this, their building. Literally, your kid played Minecraft. Yes, no?
Blake Oliver: He does, a little bit, yeah.
David Leary: It looks like the buildings in Minecraft. It's a little less pixel-y. Frankly, it looks like back in the day for AOL.
Blake Oliver: Are you looking at this story in the Wall Street Journal?
David Leary: Yes.
Blake Oliver: So, this is a crazy headline. I didn't see this until you just mentioned it. Headline is, Accounting Firms Scoop Up Virtual Land in The Metaverse. I guess you said PWC last week did this. so now, Prager Metis did this too.
David Leary: And so, they're paying to have this virtual building. And literally, it looks like a seventh grader made this in 1988.
Blake Oliver: So, this looks a lot like the app that we used when I went to Boomer Consulting.
David Leary: That was a virtual event platform, right? And it was-
Blake Oliver: Nobody was calling it the metaverse earlier this year, or last year. Maybe it was in 2020 when they did it. But during- it was a virtual conference, and it looked like really crappy version of- I mean, not a crappy version. Just, it looked like Second Life, which was the original VR world, which I don't think we've come that far.
David Leary: This looks like the same crap I saw in the early 90s. It's just bad. People are going to realize that the metaverse is completely bad. Now, they plan to use this virtual building to advise companies, and other new and existing clients on tax and accounting issues.
Blake Oliver: Jesus, they paid $35,000 for this. Maybe they should have given that to their staff as a bonus or something.
David Leary: Buy them bigger monitors, I don't know. It says, chances are there are clients decent-sized businesses. They're going to consult to a founder, an owner, or a CO company, and they're like, “Hey, meet us in our virtual-”
Blake Oliver: “Put on your Oculus headset, and come have a meeting with us in our virtual building.”
David Leary: “And we'll give you your tax advice.” It just-
Blake Oliver: David, I am actually excited about this, because this is going to give me a reason to buy an Oculus as a write-off. Because then, I have to go investigate it for our podcast. So, I think we should both buy Oculus headsets, or whichever one is popular, right?
David Leary: If I get it, it’s the Facebook one. Yeah, Oculus.
Blake Oliver: And we'll do a virtual event in the metaverse for our listeners, perhaps. Maybe on LinkedIn metaverse?
David Leary: We will buy a building and people can come hang around in there.
Blake Oliver: The Cloud Accounting Podcast studio. Maybe one of our sponsors could sponsor it in the metaverse.
David Leary: It'd be a virtual studio.
Blake Oliver: Amazing.
David Leary: I'm staring at this picture and I'm just like, “How does somebody justify that to their boss?” Like, “This is what I spent our $30,000 on.”
Blake Oliver: Because you're spending $35,000 to get a mention in the Wall Street Journal, which is totally worth it.
David Leary: To be made fun of by The Cloud Accounting Podcast.
Blake Oliver: Well, yeah. Now, more people know Prager Metis than ever knew it before, because of our amazing reach across the accounting profession. We've made them famous now. It worked. They tricked us, David. They got us to talk about them.
[01:01:23] What's in store for Tax Season 2022?
Blake Oliver: Well, I have one more stat to take us out. I wanted to highlight a stat from Accounting Today's 2022 year ahead survey. How do accountants think that the upcoming tax season is going to go? Are they optimistic? Are they pessimistic? We don't know what's going to happen because of all this build back better stuff that's all stuck in Congress. So, we don't know if things are going to change. It could be horrible if Congress goes and retroactively changes stuff after we've all filed. That's the big fear.
Anyway, when Accounting Today surveyed people at the end of last year, surveyed accountants, 42 percent said it's going to be better than 2021. Only 17 percent said it's going to be worse than 2021, and 41 percent said about the same. On the whole, slightly optimistic that it's going to be a better tax season. And I hope it is. For our listeners who are impacted by tax and the busy season, I really do wish you all the best, and I hope it goes good. And I hope that we can provide a little entertainment and education to you as you get through it.
David Leary: For CPE credit.
[01:02:23] Lend us your ears, and get free CPE credit in return!
Blake Oliver: Oh yeah. And you can earn CPE for listening to this episode. It's not going to be right away, but usually, within the week after, you can go on the Earmark app, look for Earmark CPE on Apple or Android, download the app. You'll find this episode in there. You can earn CPE for listening to this podcast episode, and many of our past episodes as well as other shows.
We've got Heather Smith's Cloud Stories on there, we've got Terrell Turner, we've got Jason Stats. He put a YouTube video on there. This is a new way to earn CPE that hopefully, is better than what you've been doing in the past, and it's free. Marcus Mere, from Mere group, he has his podcast, and we put it on there, and we're getting more every day. So, download, sign up, I hope you enjoy. It’s my contribution to the profession.
David Leary: I've seen people tweeting out that they've gotten their CPE credit, so it really works.
Blake Oliver: It's legit. It's NASBA-approved. I am certified to offer NASBA.
David Leary: Perfect. And on that note, we should probably wrap up.
Blake Oliver: I'll see you here next week. Bye.
[01:03:29] How to advertise in our classifieds section
David Leary: Want to get the word out about your newsletter, webinar, party, Facebook group, podcast, e-book, job posting, or that fancy Excel macro you just created? Why not let the listeners of The Cloud Accounting Podcast know by running a classified ad? Hit the show notes for the link to get more info.
