The Accounting Podcast

Blake and David dig into reports from the Illinois CPA Society and National Pipeline Advisory Group highlighting issues like long work hours, the 150-hour rule, and low starting salaries. They examine the potential disruption of traditional accounting software by startups and vertical SaaS companies offering embedded accounting functionality and review some of the CPA Practice Advisor Readers' Choice Awards. Wrapping things up, they highlight the health risks of long working hours, and discuss the need for better work-life balance in accounting firms, based on a recent WHO report.


Chapters
  • (01:44) - Does QuickBooks have some new competition?
  • (07:05) - Layer wants to be a GL service
  • (10:08) - Lili's place in the marketspace
  • (13:26) - The role of accountants in software success
  • (16:28) - CPA Practice Advisor's 2024 Reader Choice Awards
  • (18:53) - Illinois CPA Society survey results
  • (25:31) - WHO publishes estimates on health costs from working long hours
  • (30:02) - The long-awaited NPAG Impact Report was released!
  • (33:11) - Identifying pipeline problems
  • (35:06) - Reasons students don't choose accounting majors
  • (49:45) - Final points from report
  • (53:31) - Blake's theory on why accounting starting salaries are low
  • (01:00:15) - Thanks for listening and remember to subscribe
 

Show Notes

Teal Announces $8M Seed Investment to Drive Next-Gen Accounting Products for Vertical SaaS
https://www.businesswire.com/news/home/20240520567117/en/Teal-Announces-8M-Seed-Investment-to-Drive-Next-Gen-Accounting-Products-for-Vertical-SaaS

Embedded accounting startup Layer secures $2.3M toward goal of replacing QuickBooks
https://techcrunch.com/2024/05/15/embedded-accounting-layer-2-3m-quickbooks/?guccounter=1

Illinois CPA Society Releases Updated CPA Pipeline Report
https://www.icpas.org/about-us/press/press-release-details/2024/05/16/illinois-cpa-society-releases-updated-cpa-pipeline-report

National Pipeline Advisory Group releases draft strategy report
https://www.accountingpipeline.org/draft-report/

Embedded accounting startup Layer secures $2.3M toward goal of replacing Quickbooks | TechCrunch                
https://techcrunch.com/2024/05/15/embedded-accounting-layer-2-3m-quickbooks/
 
The Best Tech for Accounting Firms: CPAs Voted for Readers Choice Tech Awards        
https://www.cpapracticeadvisor.com/2024/05/15/2024-cpa-practice-advisor-readers-choice-award-winners-announced/105089/
 
Lili Launches New Accountant AI for Small Business Financial Management   
https://www.cpapracticeadvisor.com/2024/05/16/lili-launches-new-accountant-ai-for-small-business-financial-management/105520/
 
Embedded accounting startup Layer secures $2.3M toward goal of replacing QuickBooks     
https://techcrunch.com/2024/05/15/embedded-accounting-layer-2-3m-quickbooks/
 
Kabbage Inc. Settles Allegations of PPP Fraud        
https://smallbiztrends.com/?p=1487492
 
US accounting group bows to calls for faster path for recruits
https://www.ft.com/content/b6562303-cfda-4c6e-bb7b-8fe6e092bb01
 
National Pipeline Advisory Group releases draft strategy report - National Pipeline Advisory Group   
https://www.accountingpipeline.org/draft-report/
 
Bench and Shopify alumni announce $11M CAD to build “the Stripe for accounting” with Teal - BetaKit                
https://betakit.com/bench-and-shopify-alumni-announce-11-million-cad-to-build-the-stripe-for-accounting-with-teal/
 
Embedded accounting startup Teal raises $8M seed          
https://www.axios.com/pro/fintech-deals/2024/05/20/embedded-accounting-teal-8-million-seed
 
The Indicator from Planet Money : NPR
https://www.npr.org/2024/05/17/1197964709/trade-wars-and-talent-shortages
 
Canadian fintech Teal raises $8M to build ‘Stripe for accounting’               
https://techfundingnews.com/canadian-fintech-teal-raises-8m-to-build-stripe-for-accounting/
 
Kabbage to pay $120M in PPP fraud settlements with DOJ
https://www.bankingdive.com/news/kabbage-pay-120-million-ppp-fraud-doj-small-business-loan-pandemic/716053/


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Transcripts
The full transcript for this episode is available by clicking on the Transcript tab at the top of this page

Creators & Guests

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] 488 million people globally, or 8.9% of the world population, were exposed to working long hours. The exposure is more common among males and middle aged adults, and an estimated 745,000 deaths from heart disease and stroke were attributable to working long hours. 745,000 people in the world died from working long hours.

David Leary: [00:00:32] Coming to you weekly from the OnPay Recording Studio.

Blake Oliver: [00:00:39] Hello and welcome back to the show. I'm Blake Oliver.

David Leary: [00:00:42] I'm David Leary, an exhausted David Leary. It's graduation week, Blake. That's why we're moving the show all around. I can't seem to fit it into the schedule this week.

Blake Oliver: [00:00:50] Your daughter graduated from high school.

David Leary: [00:00:52] Well, tomorrow she will tomorrow. Last night was the honor ceremony. And I sat there, though, and I was like, I wish they would announce what majors these kids are going into. I was like, how many of these? 200 kids that are getting the honors. Honors? Honors. I guess whatever you want to call it, are going to major in accounting. I was just that's what I did for the hour. I was trying to figure out, take guesses, you know, based on the way they looked, maybe like what they excelled in in high school. Like, that could be an accountant.

Blake Oliver: [00:01:19] But your daughter's not going to be an accountant.

David Leary: [00:01:21] She's going to go to business school. But, um, hopefully I can, you know, squeeze her arm a little bit. She thinks she wants to go into marketing.

Blake Oliver: [00:01:27] You know, play that clip. Warren Buffett saying accounting is the language of business. If you want to be successful in business, you need to know accounting. Just keep playing that over and over again.

David Leary: [00:01:35] We had a graduation party, and I would tell these kids, I'm like, you should get an accounting degree, because then you could do anything you want after college. So I'm doing my part right. Um, I've she.

Blake Oliver: [00:01:44] Could go build help build accounting software. David, which is our top story this week, is there are all these startups now that are trying to replace QuickBooks to be the next QuickBooks. And the approach is just fascinating. So where do you want to start?

David Leary: [00:01:59] We can jump into that.

Blake Oliver: [00:02:01] Um, which one do you want to start with? Because there's teal and there's layer, there's the.

David Leary: [00:02:05] Teal and there's layer. And we can rewind a little bit. I've always said, right, the biggest. And on the show before, the biggest threat to QuickBooks is probably square making a GL. I think we even had an episode titled that once, right? Because they had a blog post about how they have a GL and or Shopify having a GL, because that really. Takes quick breaks out of the pitcher. If if you're an e-commerce business, you start a business, you start on Shopify, you're getting your payments on Shopify. Everything you're doing is on Shopify. Well, now your GL is there too. You're never going to buy QuickBooks. And the same with square. You're in the square ecosystem. Why would you buy QuickBooks?

Blake Oliver: [00:02:41] Well, I got to stop you there for a second because our live stream viewers have joined us. And Gator NYC says when sea levels rise and the land disappears. That's when QuickBooks will be dethroned.

David Leary: [00:02:54] I imagine they said that's when you depreciate land. I think we got an accounting question in the chat first out of the gate, I don't know. We depreciate land well okay.

Blake Oliver: [00:03:04] So these these startups are taking a unique approach.

David Leary: [00:03:07] So approach. And if you imagine the thing apps that are out there like toast what if toast which the restaurant is using for their whole tech stack now has a GL. Because I think we've talked about in the past how a company like toast added their own payroll and some crazy 6,070% of every person that gets a new toast account just uses the toast payroll. They don't go shopping for an ADP at gusto and on pay, etc., right?

Blake Oliver: [00:03:30] Yeah, because if the built in functionality is good enough, you're going to use that. Why? Go get something else outside of the system you're using to run your business?

David Leary: [00:03:39] Exactly. And then these two startups could incidentally so layers one of them layer Fecom. They are it started by a former product leader on Square's banking team and a former engineer at Wealthfront. And the other company that's coming out to attack is teal. So it's teal dev that is a former Shopify founder and then the former founder of bench, Ian Crosby, who I think most of the listeners may or may not be familiar with. So, yeah, two of the companies that said that I've always thought could disrupt QuickBooks, they have employees now building something to disrupt QuickBooks. Right. That's a way to think about this.

Blake Oliver: [00:04:14] And teal announced an $8 million seed investment. They raised $8 million. And that's the one with Ian Crosby, the founder of bench.

David Leary: [00:04:26] That's correct.

Blake Oliver: [00:04:27] And and he's the CEO.

David Leary: [00:04:29] He's the CEO, founder, founder. Right. Yeah. Or founder CEO of bench. And I think he left bench recently.

Blake Oliver: [00:04:35] I'm saying he's the CEO of teal now.

David Leary: [00:04:37] He's one of the two founders. Yes. Yeah I don't know if he's the CEO.

Blake Oliver: [00:04:40] Described in the press release. He is described as the CEO, CEO teal.

David Leary: [00:04:45] So it's the CEO now. So think about it this way. You could build quote unquote an accounting system in four weeks. So ultimately it's bank feeds accountant accounting. So you have an API to pull down the bank feeds and categorize. And that has another bank feed that lets you basically pull out a your statements. Right. Um, so you can embed this inside your other apps. Right. And you don't have to have, in theory, this they want to kind of be the GL a little bit. Right. But if you go in a little bit.

Blake Oliver: [00:05:16] Like they that's it. That's what they built. It's a GL with APIs. So you can plug this GL into any application. Yeah. And this is the problem with QuickBooks. We were just talking about this I was just talking about this with a developer yesterday. Is that a lot of the functionality in QuickBooks is not exposed via the API. So there's a lot you can't do when you want to plug into it as a developer. Like the banks are not exposed.

David Leary: [00:05:40] Like Intuit did shut down their bank feeds API a while ago. Yeah, the.

Blake Oliver: [00:05:45] Transactions that are sitting there in the reconcile screen or whatever they call it. You can't. You can't change those via the API. So you can't build an app that will categorize people's transactions for them.

David Leary: [00:05:56] Yes. Yeah, yeah. But most of the transactions, most of the fields in QuickBooks are exposed, like the QuickBooks invoice API is probably bigger than most companies APIs. And that's the struggle with these right. Mhm. Um, and a thing like this I get the value prop like oh if I just use something like teal I don't have to go integrate with stripe and integrate with all these companies. I kind of have this middleman app that's going to do a lot of this stuff for me. And they're great on paper. And every three, 4 or 5 years we see an app kind of pop up like this. But it's very, very hard. And speaking from experience, Intuit tried to do it just for QuickBooks and QuickBooks desktop kind of one API to rule them all, and it was impossible. They had to kill the project after four years, five years. It's just it's impossible to build this one API that rules everything. But getting into layer a little bit. So layer is another interesting one. So layer just wants to be a GL as a service. So if you think about that where instead of that's.

Blake Oliver: [00:06:51] What I was saying about teal. Yeah. What's how are they different.

David Leary: [00:06:55] So. Yeah, I can. Just give me a second.

Blake Oliver: [00:06:59] Same thing.

David Leary: [00:06:59] They're very similar. They're very, very similar. It's the way they're they're marketing it. It's a little bit different. Um, so teal is trying to still be a full blown accounting system. Right. And. Layers trying to be like, hey, you're doing all this stuff in your thing. You pass data to us as a GL and we'll let you pull reports back out.

Blake Oliver: [00:07:19] Okay, so so teal is building a front end. They're not really building it.

David Leary: [00:07:25] It's not really a front end in the same way.

Blake Oliver: [00:07:29] Well, if it's going to be standalone accounting software, it's got to have like a user interface, right?

David Leary: [00:07:34] So well. Well it's still I would build on it. So I still have an app and I want to build features and functions using their back end. So so it's, so it's a faster way to develop. So instead of me connecting to gusto and maybe for payroll and connecting to APIs for, uh, stripe and connecting to APIs to, um, bank feeds like, uh, Plaid, I could use a tool like. Teal to cut that down. Right. And so now everything's I'm using them as my a little bit like a GL where all the transaction are getting sucked into one place. Right. And it becomes a platform and layers kind of doing the same thing in a way. Right. Um, but both ultimately are kind of just like bank feed accounting. They're sucking in the bank feeds and then it pulls them all in. They're categorizing it. And then you as a developer now can show a profit and loss statement in your app. So if I'm toast, I can now have the bank feed suck in to toast. And I can suck using something like layer. Actually, I think toast is one of their four customers. They, uh, they'll suck down the bank feed. Layer's going to categorize that. And then layer provides some API to push out a profit and loss balance sheet back into toast. Right. So now toast customers will have an accounting system. Right. Ultimately, um, and you can see niche app niche apps like Clio law firm software. If the lawyers in the law firm software 12 hours a day, why not just have the profit and loss there? This really makes a lot of sense on paper.

Blake Oliver: [00:09:01] Yeah, the vast majority of small businesses, this is what they need. Yes. And they would be happy to have this in whatever system they use to run their business.

David Leary: [00:09:09] And the the funny thing is now which one is it? I have a note here. Oh, um, if you go into teal dev and you look at the developer docs, one of the major pieces of their documentation is how to connect it to QuickBooks. Right? So at the end of the day, right, like these, these products like this. Yes. They want to replace QuickBooks at the end of the day and ask go ask zero zero spent a billion and a half dollars now maybe $2 billion in the US market to kill QuickBooks. It's very hard. So even if you have the technology to build everything, Intuit is a marketing machine. It's very hard. You're probably still going to have to play nice and work with QuickBooks at the end of the day. Yeah, um, it's a little tough, but there is an example of a company that's kind of doing this at a smaller scale. Another company, there's a company called Lily. So Lily Co, it's one of those new neobanks. They've been very focused on super small businesses. Right. And their app before had some basic accounting in it. Right. So you could have your, you know, what's the URL. Uh, lily.co.

Blake Oliver: [00:10:09] Lee.

David Leary: [00:10:12] Lillico.

Blake Oliver: [00:10:14] L I l i.co.

David Leary: [00:10:16] Yeah. So that's my eyes. And L's don't look the same okay. And it's a small business bank. And I think up to this point like they've had a little bit of categorization. So you know the people that co-mingled their personal and their um business finances so they could swipe the transactions in the bank feed left and right. It's personal. It's not personal or personal or it's business. Right. But they announced recently this week that they launched a new product called accountant I. And it's going to respond to queries using extensive training to the latest tax and accounting information. But unlike other AI chat bots on the market, they'll generate insights from both the owner's business and similar businesses on Lily's platform, making recommendations based on the latest tax policy updates, and leverages human accounting expertise. But I don't think that's the bigger story. When you're on Lily's website and you start poking around, they've basically built it's a small business bank account, but they've built a tech stack that's full accounting. So they have basic accounting, they have bill pay, they have invoicing, they have tax planning. Like it'll set aside money for your taxes. And then when you're all done it pre fills in your schedule C for you fills in the whole tax form. So you have the PDF. It's all done right. Right. So they're they're they are disrupting QuickBooks maybe the self-employed product.

Blake Oliver: [00:11:27] But the problem is that as soon as you have a bank account that's not with Lily, how do you get it into their accounting? And none of these solutions solve for that. And that's why people end up using something like QuickBooks or Xero, because I'm not going to run my entire business on your app.

David Leary: [00:11:45] Well, it's the a lot of these are built on these banks, right, right, right.

Blake Oliver: [00:11:49] I'm saying.

David Leary: [00:11:49] Like there's any.

Blake Oliver: [00:11:50] Piece I would I would tell a client, I would never advise a client to have only one bank. We saw this with Silicon Valley Bank, right? Yes, yes. Always have at least two banking relationships. So you can't use Lily's accounting to run your business. If you have two banks, can you? I'm I assume they're not going to let you plug in your other bank account into their software.

David Leary: [00:12:10] But this is where somebody like Lily could use one of those two other apps to connect to it. They could third party bank should another bank.

Blake Oliver: [00:12:16] But nobody's that like far sighted. They all think that we have to keep these people in our little walled garden in order in order to, to stop them from going elsewhere. So they don't build tools that work across apps. So that's the problem with like, uh, you know, toast, for instance, building its own GL is okay, that's great as long as my entire business is running through toast. But what if somehow I develop a new product or service that I don't sell through toast? How do I account for that?

David Leary: [00:12:45] Now, going back to we, uh, I don't know if we were at NetSuite or Intacct. It was the Shark Tank guy who said all businesses are everything businesses, or that's the gist of it, right? Yeah. There's not just a product business or a service business or an inventory business. You're everything businesses. And you're right, these things are too specialized. Um, now it's the other thing is that Intuit does well, they win accountants. Same thing with Xero. They win accountants, right. These products have got to an accountants or like your example, they'll just switch them off the product. And that could be the reason I noticed in Teal's examples of use cases of things you can build with teal. They have literally a sentence, a managed bookkeeping service which prepares bookkeeping on your customer's behalf with live bookkeepers. So so they're marketing this as a as a tool for. Live bookkeeping type services for firms to possibly build and use eventually.

Blake Oliver: [00:13:35] But the big question is, will they let you post journal entries? Right. What do they have? The tools that accountants need to adjust the books. And is it easy to use and. Otherwise. Like you said, we're just going to move the clients onto QuickBooks because that's what we need to do our jobs and we know it and we don't have to screw around with it. I mean, to your point, even FreshBooks can't get traction in the US market compared to QuickBooks. And it's because they for years and years, they didn't have any of the accounting tools that they needed. And now they've built those like you can do journal entries and in in FreshBooks now, but it's still hard to get accountants.

David Leary: [00:14:17] Yeah.

Blake Oliver: [00:14:17] So. Accountants are like a huge barrier to any new accounting software because. You've got to build something that, like we all know, QuickBooks isn't isn't perfect, right? But we know it. We know how to use it. We know how to adjust it and fix it. So if you're going to build something else, it's got to be like ten times better than QuickBooks. That's always the argument for not starting an app, right, is unless you can make it ten times better than something that's out there. Now, the friction, the cost of of changing is so high that people won't do it. Even if it's two times better, we won't do it.

David Leary: [00:14:55] In the market penetration. So I don't know if you saw the CPA Practice Advisor Reader Choice Awards came out and it's 2024 and you think about penetrating accountants, I am shocked. In summary, I'll just summarize this survey. How many Non-cloud solutions are the winner in so many categories? It's Drake grunt works Thomson Reuters Intuit Fixed Asset Manager one, Office Tools, QuickBooks desktop, QuickBooks Premier nonprofit. These are all legacy desktop tools, and they're winning with 33, 40, 45% of the votes in a lot of categories. Um.

Blake Oliver: [00:15:30] Any surprises to you?

David Leary: [00:15:32] Uh, I've surprised for you, though, but yeah, so they have a category called favorite CPE provider, and Drake was the big winner with 17.5% of the vote. There's something called Drake CPE. Um, but a runner up that's way in the bottom, coming in at 1.5% is earmarked CPE.

Blake Oliver: [00:15:53] Heck yeah.

David Leary: [00:15:54] Beating IRS at 1.2%. So congratulations.

Blake Oliver: [00:15:57] The IRS.

David Leary: [00:15:58] We're on the list. We're beating the IRS. Yes for CPE.

Blake Oliver: [00:16:01] That's fantastic. We even beat Sequoia. Wow.

David Leary: [00:16:04] So but if you look at this list like there's at some level there's a lot of market space for new products. But at some level, like how do you get people to stop their old habits?

Blake Oliver: [00:16:15] Well, it's very fragmented. But this is good news, right? Because this like you look at like CPA Academy has 12% of the market, right? Yeah. Aicpa has 6.7. Now this is among small firms because this is CPA Practice Advisor. But like you know, I know that AICPA is doing pretty well with their CPE and CPA Academy is doing they're bringing in revenue. Right. We know the founder. So all we have to do is get to like 10% of the market. And we have a great, successful, long term, very, very healthy business. I mean, our business is is is doing great now. Right? So this is exciting.

David Leary: [00:16:51] That's great. Good news. And then the last the last thing that's always in here. Every year they have the annual favorite form of physical exercise during tax season. They ask this question every year and they let people pick more than one answer. But the number one answer is quote unquote, who has time to exercise during busy season at 42%, followed in second by jumping to conclusions at 12.4%. That's the two biggest forms of exercise for accountants. Then walking at 12.1%.

Blake Oliver: [00:17:22] I wish they did a real like it wasn't a joke question. I wish they did a real question here because as somebody who just recently became, has any of my friends will attest to, I've recently become super annoying because I've I've gone on a fitness kick right? Since September. I've been swimming virtually every day I can, which is almost every day.

David Leary: [00:17:42] Almost a full year.

Blake Oliver: [00:17:43] For, for since September. I'm up to a mile a day and I'm doing other exercise too. I'm cycling, I'm running, I'm getting I'm aiming to get an hour and a half of actual exercise every day. I set aside two hours for it. Right? I have never felt better in my entire life. And so when I see people in busy season neglecting their health, which I used to do, you know, I was part of this, uh, I think this is awful and this is bad, and it's actually it's got to have long term consequences. And this is the problem with accounting. We saw that with. A report from the Illinois CPA society this past week. They released a new pipeline report. They did a big survey of like 7000 accountants, accounting students, young accountants. And that's.

David Leary: [00:18:31] A lot.

Blake Oliver: [00:18:32] That's yeah, it is.

David Leary: [00:18:34] A massive participation that number.

Blake Oliver: [00:18:35] And they found basically some some, you know, some unsurprising results here. And I'll put this up on the screen. And the other survey that we saw this past week was um, the National Pipeline Advisory Group, N.pag from the AICPA put out their draft report and they teased some statistics about the pipeline problem in accounting and recommendations to improve it. So we're going to talk about both, um, and David, I will let you decide where to start. Do you want to start with the AICPA report, or do you want to start with the Illinois CPA society report?

David Leary: [00:19:14] Start with the Illinois CPA society. And then I thought you had an article about death like overwork causing death.

Blake Oliver: [00:19:20] I do it all leads into this. So okay, so here is, uh, the Illinois report read Decoding the Decline. I guess that's because they they had a report earlier that was decoding the decline. Uh, um, and. Let's go down to the highlights. Right. Uh, one, the perceptions of the CPA credential are largely positive, even among those who don't want it. Just 1% of respondents said the CPA credential isn't valuable. We know this, right? It's it's you know, 84% says it opens doors or no, it builds credibility. Uh, 83% said it opens doors like people in accounting. And these are accounting students and current CPAs perceive the value of the CPA as do I. Right? I'm not going to say like it doesn't have value. It has a ton of value. It helped me with my career. I recommend that everybody who has the money and the time in accounting to do it does it. But the top barrier. To becoming a CPA is in the survey, not the 150 hour rule. It is workload time commitments to study for the exam. That was the top challenge to becoming a CPA. So accountants are working too many hours to have time to study for the exam. Uh, that was 25% of them. That's followed by personal time commitments to study for the exam, which is 18% of them. And to me, those answers are basically the same. It's not having enough time, whether that's because of work or because of personal commitments. And I view personal commitments as generally family. And they're related, right? Because if your work takes up so much time in your day that you don't have time for your family, and you've got to sacrifice time for family to study for the exam, it's the same thing as if opportunity.

David Leary: [00:21:04] Cost.

Blake Oliver: [00:21:04] Right? Right, right. So you add that together, you know, and you get like 43%. That is the reason they are not becoming CPAs is because they just don't have the time to do it because of work and family commitments. So what I, what I disagree with this report on is that they conclude the Illinois CPA society concludes then. Well, that is not the 150 hour rule. That's the problem, because that's only like 7% of. I don't see it here on this page, but I think it's only like 7% of respondents said that was the biggest barrier for them. So it's the workload time commitments that is the biggest one. Now, I agree that the biggest problem is the overwork in our profession. You see it on social media, you hear it from other accountants and people say, I don't want to work those long hours. I don't want to work the double busy season, the triple busy season that accounting has turned into. I'm going to go do something that gives me a better lifestyle. Right? So 100%, I agree that the 150 hour rule, the extra education is not the top issue, but 7% is still a big number. And I think it's understated because this survey only reached current accounting students and current CPAs. So when they do these surveys, they are missing a huge group of people who heard about 150. Let's say there they were accounting majors. They heard they have to do five hours, five years. And they said, you know what, I'm going to go do a different business major that only takes four years. Yeah, those people didn't get surveyed. So all the people in that survey.

David Leary: [00:22:45] They did not.

Blake Oliver: [00:22:46] Know, not in this survey. They never get surveyed until we talk.

David Leary: [00:22:48] That's not true. Wait until we talk about the n.pag results.

Blake Oliver: [00:22:51] Oh, they surveyed the the non accounting students okay.

David Leary: [00:22:54] Yeah. We're going to get into I'll let you finish and we'll get into that whole the results.

Blake Oliver: [00:22:58] Um so cost of the exam right is only 6%. Yeah. Oh, and the overall cost of obtaining the additional 30 credit hours was cited by 5% of respondents. But like that is still meaningful, right? If you change the requirements. So that you didn't require this meaningless 30 extra semester hours of education that we know adds no value, that 80% of CPA says adds no value. Then it would actually make a difference. That's that's material. Right? The cost and the time is material. So I wish they wouldn't do this, draw these conclusions because they they can't do that because they didn't survey the people who left because of it. So. But I do agree with the conclusion that the key to unlocking the CPA credentials appeal is overcoming time constraints, right? We've got to reduce the workloads. There's got to be more flexible work. Uh, if you don't do that, you can't be competitive. And I've got a report from the W.H.O. that backs this up that it's not just bad for the accounting pipeline. It's actually bad for your health to work. Busy season hours.

David Leary: [00:24:12] Like they surveyed the people that that died from working hard and busy season.

Blake Oliver: [00:24:16] So the World Health Organization. Published joint estimates on the global health impact of long exposure of exposure to long working hours, defined as 55 hours or more per week. And that sounds like a lot of busy season firms, right? And. Basically 488 million people globally, or 8.9% of the world population, were exposed to working long hours. The exposure is more common among males and middle aged adults, and an estimated 745,000 deaths from heart disease and stroke were attributable to working long hours 745,000 people in the world. Died. From working long hours.

David Leary: [00:25:04] That's like COVID number. These are pandemic numbers and nobody's. Acting with the same urgency to help stall these deaths, right? Yeah.

Blake Oliver: [00:25:14] Um, and I think, you know, that's a big number, and it's kind of like, meaningless to think about it on a global scale. But let's just think about it on a personal risk scale. So working 55 plus hours per week is associated with an estimated 35% higher risk of stroke compared to working 35 to 40 hours a week. So if you work, if you overwork. You have a 35% higher risk of stroke and a 17% higher risk of dying from heart disease. Compared to working reasonable hours. See your risk of stroke 35%. Higher risk of heart disease 17% higher. Now, this could be for two reasons. It could be that the long hours lead to unhealthy behaviors. As we saw in the CPA Practice Advisor article, where people are not working out, they're not exercising. And then that leads to, you know, overweight.

David Leary: [00:26:12] Being sedentary, being.

Blake Oliver: [00:26:13] Sedentary, smoking, alcohol use. We know accountants like to drink a lot. Right. There's jokes about that. Why? It's because it's how we deal with the stress. Right. Impaired sleep. But there's also this fact that like when you work long hours and you're stressed out, stress hormones may cause functional and structural damage to the cardiovascular system. Which is also how Covid kills people, right? It messes with your cardiovascular system. So stress has an actual physical. The hormones produced by stress have an actual physical like damage to your heart.

David Leary: [00:26:46] Yeah, because you're only supposed to be stressed for a couple of seconds. So you could do the the flight or fight. Yeah. And that should go away. But you shouldn't be stressed like that day after day for hours on end, you know.

Blake Oliver: [00:26:55] Working. So this W.H.O. report says that, you know, for optimal cardiovascular health, individuals should aim to work no more than 54 hours per week on a regular basis, and 35 to 40 hours is the ideal range. So I say on this program, on this show that big firms have a toxic culture. And it's literally true in the firms and the and the teams that are forced to work more than 55 hours per week on a regular basis, they actually will kill you. They're killing people.

David Leary: [00:27:27] We had our episode titled It should have been That we messed Up. Big, big firms are killing people.

Blake Oliver: [00:27:33] So occasionally working the longer hours may be okay, right? But the problem in accounting is that these busy seasons are more than once a year now, and they're long. And I honestly think that, like, even if you work even one week at a time is bad for you, right? I've experienced it working that many hours for even one week, which I tend to work like if I'm traveling, you know, during conference season or something. Yeah, you're basically working those crazy hours because the travel is like work and it's stressful and you're not doing exercise.

David Leary: [00:28:03] Yeah.

Blake Oliver: [00:28:04] And I feel it when I come back now I feel how how bad I feel. So putting these two things together, the Ispa. S report, the Illinois CPA society report on the time, and then this report on the health impact. We have to reduce the hours, or we're going to keep killing accountants and pushing them out of the profession, you know, because people tend to flee toxic work environments. What about the N.pag report?

David Leary: [00:28:32] Yeah, let's talk about the N.pag report because and I should put the link in the chat. I'll let you drive. We go through it because I kind of mapped out the different pages. It's about 82 pages long and okay, summarizing this and I mapped all this out. But it's funny because last week I was busy right between graduation, I did some traveling, and I think I texted you on Wednesday and I was like, hey Blake, it's mid-May and we have yet to see the pipeline report. Remember they were working on this. We're going to see a report. And then on Friday, I'm listening to NPR's Planet Money podcast, The Indicator. And they flat out basically say, oh, the ACA is open to getting rid of 150 hour rule. And I was like, I almost crashed the car. I'm like, where did this come from? So on Monday or Tuesday of last week, the National Pipeline Advisory Group released their draft strategy report. And over all the high level summary. Blake. Wow. They addressed every one of Blake's concerns about the future of accounting up and down, left and right, and came up with proposed solutions. Arguably, they could have done this just by listening to the podcast and pulling from our show, taking our.

Blake Oliver: [00:29:37] Recommendations and.

David Leary: [00:29:37] Making our recommendations. But they wound up well, what they did is it was two reports. There's an executive summary and a draft report.

Blake Oliver: [00:29:43] Yeah. Which one do you want me to pull up right now?

David Leary: [00:29:45] Pull up the draft report. Okay. The actual draft strategy report and what you're doing that just high level. They surveyed more than 7800 students in accounting professionals, including students that did not major in accounting. Right. And then they had about 1600 people who participated in many focus groups.

Blake Oliver: [00:30:03] So they surveyed students who are not majoring in accounting.

David Leary: [00:30:07] Correct. And they used a lot of other studies. So in this report, it cites lots of studies we've talked about on the show before, right where it's 150 hour rule. It's this it's the busy work right. Things you just even spoke about just now. But they spoke about a lot of that. So let's kind of run through kind of what's in the report. So pages 1 to 8 is just a repeat of the executive summary okay. Right. And they broke. If you scroll up a little bit they broke this down into themes. Mhm. Right there. And so these six themes are kind of the big chunks. We'll talk about a little bit as this goes on I noticed.

Blake Oliver: [00:30:40] That theme number one is the one that the ACPa loves to focus on, which is telling a more compelling story. Yes. They always seem to lead with we need we need to tell a better story about accounting. That accounting is a great career. And yeah.

David Leary: [00:30:52] And then they identify seven stages of the accounting pipeline. So you have like middle school through high school college graduation preparing and passing the exam, getting licenses CPA and employment 1 to 5 years, employment six plus years and then later stage career to retirement. They they really only want to focus on those first five. Right. So they're not going to focus on six plus year people or late stage career to retirement. Right. That was really what they focused in on right.

Blake Oliver: [00:31:18] Beginning of the pipeline.

David Leary: [00:31:19] So pages 15 to 24 is a little bit more background. They bring up the factors that are causing the shortage. A lot of these we've discussed to death on this show before, and they're talking about how in general, students are opting out of a bachelor's degree. There's a changing US labor market. And one of the stats I thought was interesting, only 1 in 9 business majors chooses accounting. And then you start. Then they start the funnel from there. And then well, of that one and nine, some won't even, uh, get a bachelor's degree at all. They won't do accounting. They'll go on to the degree level. They won't sit for the exam first. Even less will pass it. So you see how that trickles down to nothing at the end of the funnel? Um, they also talked about it's a global issue, 28 of 33 accounting bodies around the world believe there's a shortage, right. They also talk about immigration. Ultimately, there's just 1.65 million less working bodies available in the US market right now. Like we we just don't have bodies to do the work. And then they have a thing on, uh, impact of technology and the I and I think they just put that in there because everybody puts AI into everything these days. So you can just skip the AI part. It's a stupid paragraph. And then page 25 is a transition to the themes. And so now we get into those themes. So theme one is pages 26 to 34. Can I just stop you?

Blake Oliver: [00:32:35] Because I was scrolling through and I saw this chart here, reasons for not choosing accounting as a major. So this is this is the survey of students that considered accounting but chose not to pursue the major. And the additional 30 credit hours required post bachelor's degree to qualify for CPA licensure among with lagging salaries topped the list. So let's let's look here. You can see this if you're on YouTube with us right now the the top reason which got 70%. So there's there's there's like a major reason and part of reason. And you add those together and you get 70% lack of interest slash passion. I think that's fair. And also I don't think we're going to change that. Right. Like you either like accounting or you don't. I suppose if you had a better teacher in Principles of Accounting, maybe like that could get you hooked better. But also like accounting is accounting and some people are going to like it and some people are going to hate it. Right. So the second one here is higher salary with other major. And that's that's like the big issue. Right. We saw that with the Illinois Society report. We see that with this report.

David Leary: [00:33:41] And this was not their data. This is actually another study that was done. So they quoted a lot of these existing studies that we've talked about in the past, probably this one as well. But check this.

Blake Oliver: [00:33:51] Out. So this is where this report diverges from the Illinois CPA society. Is didn't want to pursue 150 hours for CPA. That's 57% of the respondents. For 57% of them, that was either the major reason or part of the reason. And for 28% it was the major reason. Yeah. So think about that. If 100 students start in accounting, 28 of or considered accounting, 28 of those 100. The 150 was the major reason they didn't. Pursue accounting.

David Leary: [00:34:26] Yeah, those eight out of 9 or 7 out of eight, depending on the number that are not pursuing their business majors, but not pursuing an accounting degree. Yeah, a good chunk of them. It's because of the 150.

Blake Oliver: [00:34:37] And and 52% it's can't afford it. Right. So so 25% said it was a major reason that they can't afford it. And 28% said it was a major reason that they didn't. They just didn't want to do it. So like that's meaningful. That's huge. The extra education has a cost. It turns away accounting majors and they major in other business subjects. Hard stop. Everyone needs to stop saying that it's not 150 because it is. All right. Sorry, David. I just had to point that out.

David Leary: [00:35:12] And this is what's great because your soapbox, like I kid you not, has been addressed by this. I was going through this whole doc and I'm like, wow, they caught all of Blake's things. Now Blake's going to make fun of some of it, some of their solutions, but that they've addressed them at a high level. Um, so again, you.

Blake Oliver: [00:35:27] Were I derailed you and you were on page 2820.

David Leary: [00:35:30] 2234. Right. Okay. The theme of telling a more compelling story, okay. And the reason they think this is important and this is really urgent because this will help halt the erosion, right? That's happening of people eroding and not wanting to do this. Um, they think people need to stress less tax and audit stress that accountants provide value in society, stressed the non balance sheet and profit and loss task. All the other things accountants can do financial crimes, tax payer interest, non-profits. Right. Um, they've come to the conclusion outdated messages are no longer resonating. You know, in K through 12 they want to do more programs, gamification. They want to make a navigator app to help people navigate their accounting career in the exam solutions. Right as a front door. Um, now I do question whether they say that this is the highest ranking exam related solution, which was kind of interesting because I could see the navigator app building a navigator app. I just see this not actually being a solution, but want to build it. Navigate what the your career as an accountant in the CPA exam and all that type of stuff.

Blake Oliver: [00:36:32] I think definitely for like getting licensed, having one place to go where you can actually see exactly what you have to do to get licensed would be great because I had to build my own spreadsheet, spreadsheet, figure out what courses I needed to take.

David Leary: [00:36:44] All right. So well, maybe that then I believe it. Then I think maybe that was their highest survey result. Um, the other thing they've done, I'm going to paste the link in here, is they want everybody in the industry to take the pipeline pledge. And this is the part I think you'll make fun of a little bit. But they're calling they want you to participate in two activities of your choosing that have the potential to grow and influence the talent pool. And basically it's a lead form. You just go in and put your your contact information. If you click the link, you'll see it.

Blake Oliver: [00:37:14] So like we're going to do oh, you're pledging to do two outreach or growth activities of your choosing annually that have the potential to influence and grow the talent pool.

David Leary: [00:37:23] Yeah. So you go speak at Career Day. Maybe you create a podcast, I don't know, making this up. So so this is the tele compelling story. I know you kind of hate this one, but that's one of the things that K industry help us out here. Right. That's one. Yeah. Um, the second one and we've talked about this on the show pages 35 to 40. Theme number two make the academic experience more engaging. Only one of three business majors not pursuing accounting. So basically if you find three people not pursuing accounting, only one is going to say that they found the content interesting. The other two are like accounting is boring. I hated it, right? Right. So if the content's not interesting, tie more of accounting to entrepreneurship and technology, right? That would make a lot of sense. Have your best, most engaging instructors. Do the accounting 101 classes. Yes. Maybe don't start with debits and credits right away. Maybe debits and credits are. Way late in the semester. So people get all this other exposure to the accounting everything, and then debits and credits are a piece of that. And then put real life practitioners in the classroom. No more. Yes. You know.

Blake Oliver: [00:38:32] So that's that to me is how you make accounting real and interesting is stop with so much theory and get to the application of it sooner. And a lot of programs never get to the application of accounting. You know, I didn't do any real accounting in my in my courses when I went back to school. And the only way I learned it was by doing it in real life. So I had the benefit of working and learning at the same time, running my own bookkeeping business. And I really wish more programs would actually teach accounting in the context of like, let's do the books for a real business in the community, and you're going to learn how to actually post the transactions and run the reports and do the invoicing. And you know that that's when that's when it's kind of fun.

David Leary: [00:39:17] It's the real job of accounting.

Blake Oliver: [00:39:19] Yes, exactly. And not just all this t accounts and, you know, theoretical stuff going on. I mean, you could do it with simulations too, but yeah, that would help a lot.

David Leary: [00:39:30] So pages 41 to 53 is three. God.

Blake Oliver: [00:39:34] How long is this report?

David Leary: [00:39:35] 80 pages.

Blake Oliver: [00:39:36] Okay.

David Leary: [00:39:36] So uh, theme number three is addressing the time and cost of education, aka the 150 hour rule. And so they had a they which is in testament to this group, this committee, they really did I know they, they, they spoke to spoke no stones were unturned. Everything's on the table. They really did do that. Blake. So they quoted all these external surveys, basically showing how the 150 hour rule caused people not to major in accounting. Right. And then they kind of started, and.

Blake Oliver: [00:40:04] Especially the one I want to highlight, you know, a 14% decline, 14 to 26% decline in CPAs due to the 150 hour rule. Yeah, that was a study by at MIT Sloan, and it was 26% for minority CPAs. So for all that these state societies and the AICPA talk about needing to improve diversity in the profession if they actually wanted to do it, this is the way to do it.

David Leary: [00:40:30] And this hurt diversity the most, that actually the numbers are worse on 150. Yeah.

Blake Oliver: [00:40:35] Because guess what? People with less financial means and family support. Which tends to be more the case in minority communities. They're the ones who are hurt the most by 150.

David Leary: [00:40:47] And they thought about this really well and they agree. They basically they want to get they want to get rid 150 hour rule. And they've thought about it to some way. Also futureproof it a little bit. One of the things they said you can't count hours anymore at all because there's some universities now that might start issuing bachelor degrees with just 90 hours. Now what? Right now this whole thing is you can't just move it back to 120. So they have three recommendations like a today recommendation, a near-term and a long term. So today they want to just make it cheaper as fast as possible with like earn and learn type programs. Right. And that's the one.

Blake Oliver: [00:41:20] Where you work at a firm and you take online courses and you get your they work with the.

David Leary: [00:41:24] University to get credits because they're still on a transcript. Right? The next, the next milestone or near-term is to get learning off the transcript, take colleges out of it. Employers do the training like we're seeing with pilots in the airlines, right. You just take college out of it. No more. Transcript. Longterm doesn't exist at all. Compensation, competency based licensure. Basically, the exam is the milestone. That's it.

Blake Oliver: [00:41:48] Well, the simple thing, the simple thing would be just require a bachelor's degree from an accredited university educational institution. No mention of how many hours it took you to earn that. So that way, if if a college offers a three year bachelor's, you can use it. And the exam. And make the exam really rigorous. And there's no like, this is the thing I love about this report. They actually say we need to move away from an inputs based, hours based education model.

David Leary: [00:42:22] And they even suggested that giving college credits for your transcripts, for taking the review courses like they have, they've really went out of the box on this. It's it's shockingly how, uh, how they got off the The Standard Company line to put in this report. Um, there is some concern that, you know, 59% of the people on the survey still think that it could have a negative effect in reputation on the the profession, but 69% say that changes should occur. So like overwhelming because you've been saying this for a long time. Survey your members and look at 70%.

Blake Oliver: [00:43:00] So the state societies have surveyed their members and they find, you know, like 80% want a change. So this is closer to. Two thirds. Wait, what was it? How many say there should be a change?

David Leary: [00:43:14] 69. 69%. Yeah.

Blake Oliver: [00:43:15] So change. So, like, you know, call it 70% of AICPA members, which is, you know, includes more of the big four firms. Right, right. It so so that's actually that's that's, that's that's enough to get a constitutional amendment passed.

David Leary: [00:43:30] Right? David. Crazy. Yes. And the other crazy thing about this, you know, their arguments always been about mobility. So they had their national pipeline surveyed. So this is from their data. So they had a question. True or false question a CPA license in one state jurisdiction allows you to participate in person and remotely across all states and jurisdictions. True or false? I'm asking you, Blake. True or false?

Blake Oliver: [00:43:53] Well, the people who support like mobility.

David Leary: [00:43:58] This is true, right?

Blake Oliver: [00:43:59] Well, theoretically, yes.

David Leary: [00:44:00] Yes, 58% say it's false. So? So CPAs don't even know mobility exists. So they're trying to make.

Blake Oliver: [00:44:07] The reason is that we have this thing called mobility but we don't what we don't have is reciprocity. Yes. And the reason that most CPAs don't value mobility is because mobility doesn't actually help you when you move physically from one state to another. Like if you if I like wrote if I relocate back to California. Now that I'm an Arizona CPA, California doesn't recognize my CPA license in Arizona and will tell me and they do this to people. Will will see that I'm in California and say, no, no, no, you need to get licensed in California now. Yeah. So so mobility is actually very, very limited. It just allows you as a, you know, CPA in your state to serve clients outside of your state without getting in trouble with that board of accountancy. But it doesn't actually help you move around the country.

David Leary: [00:44:57] Yeah. Which which ultimately that needs to exist. Right?

Blake Oliver: [00:45:01] Right. Like so mobility is is. This whole excuse that we can't do things because of mobility is just, in my opinion, it's just this small little segment of audit, right? They want it. They want it so that they don't have to go hire people in all these different states. But my my answer is, look, you can solve for it. Just hire people and let them work remotely. So if you're in Arizona and you want to serve California clients, just hire some CPAs that live in California and are licensed in California and put them on the audits. Yeah, it's it's it's not hard to do it anymore. Like the whole reason mobility was created is because it used to be a big hassle to do that. Right. Nobody had remote work 20 years ago. Yeah, right. So you needed mobility because you needed your Arizona CPAs to do those New Mexico audits or California travel around. Yeah, yeah. But now we can just the firms can just hire people anywhere. So there's your solution.

David Leary: [00:45:57] The hammer threw the last four themes because again, uh, so 53 to 59 is theme for increased support for CPA exam candidates. And so they want people to be able to take the exam while they're still completing their coursework, which would make sense. I mentioned before, uh, college prep courses or test prep courses count towards college credits. Um, employers should need to share best practices, pay uh, easier workload when studying exam paid for bonuses for passing. Right. They want some things you've hammered on last. Even as recent as a week ago. Faster exam score releases. Right? That needs to happen. Uh, maybe there's a cloud based exam data warehouse. Right. So that way people get their scores the next day instead of waiting. Whatever. It's up to 20 days, if not longer for a lot of people. Uh, theme five pages, 60 to 67. Prioritize strategies to expand access for underrepresented groups. It feels like the session was in there, but it just feels like a weak section because a lot of it is. All the other things they do above is going to definitely help diversity, but they definitely call out that they want to, um, do more with HBCUs.

David Leary: [00:47:02] Um, increase financial assistance, make sure the exam doesn't have bias in it, and that's all going to help. And they have a strong goal. The goal is to have each cohort of accounting degrees to have a higher diversity, uh, ratio than the respective ratios of the US population. So they want to consciously tip the scale in accounting the other direction. And then theme six is, uh, you just were talking about this enhance employee experience by evolving business models and cultures, increasing salaries, making firms the employer of choice less hours, mental health, remote, hybrid, right trim, client based, increased capacity. All the things we've talked about on the show, things you know about. But that's. Surprisingly, you know. Everything and that we've ever talked about on the show, they've covered in this survey, and they came to the right conclusions. I'm so glad this doesn't feel like the typical mouthpiece political stuff coming out, considering this is naspa, ACPa, big firms who all worked on this pipeline.

Speaker3: [00:48:02] So.

Blake Oliver: [00:48:04] As we as we agree with. As we've seen, starting salaries are probably the biggest problem. 84% of respondents to this survey felt raising starting salaries would be very effective at encouraging people to choose a career in accounting, and 85% of students agreed. Are there any recommendations in this report as to how to actually increase starting salaries? That you read, David, did you see any recommendations for.

David Leary: [00:48:29] That other than, um, yeah. Trimming your client base to increase capacity, but that's not really the exact, uh, yeah, not not really. There's not. Okay. Straight up. Start paying more.

Blake Oliver: [00:48:40] I have an answer to this. I know why starting salaries are low in accounting. And I'm going to I'm going to give you my theory. And then hopefully we're going to see the same thing happen over the next few years where these groups start to explore this and then they come to the same conclusion. Right. So why are starting salaries low? It's got to be two reasons, right? Um, and the the most direct reason is that the firms simply don't value the people they are hiring that much. Right. And that would indicate they don't have the skills that the firms are looking for. Think about it. You spend five years getting trained to be a CPA, and you go get hired by a firm and you're negotiating your salary. If the firm really values what you learned in school, they're going to pay you more money. And if they don't value that much, they're going to pay you less money, right? You are a product of that educational institution. So one reason that starting salaries are low is potentially that these students aren't getting the education. They aren't learning to do the things that the firms value. And we see this right. If you talk to firm owners and you ask them if you hire somebody straight out of school, can they actually do anything? The answer is no. These firms have to then train people. To actually be able to do the work because all these people learned is a bunch of theory. Yeah, and they've never applied it. Right. You come out of school having passed the CPA exam with a master's, you can't do an audit. You don't even know where to begin. Same thing with doing a tax return, right? Most schools never even expose you to like the software that you need to do the tax return.

David Leary: [00:50:22] It's not even an audit. They can't even reconcile QuickBooks. You can't do a reconciliation like so.

Blake Oliver: [00:50:26] These students, like I put the blame squarely at the foot of the universities and colleges that have these curricula. Is that the right word, plural of curriculum? They have these courses that are just teaching people theory. That's like 100 years old, and they're not teaching them what they need to know to be successful. So I blame the the educational institutions for the low starting salaries. Now, they're not the only ones, but that's a huge part of the blame. The second reason that these salaries are low. Is harder to solve, which is that the accounting standards that we use. The GAAP generally accepted accounting principles are old fashioned. They are not useful to most businesses anymore. I will, I will. I'll argue this point with anyone who wants to in that, like most of the high growth businesses now are using alternative metrics because GAAP is is in many ways obsolete. And how do I prove this? Well, just look at the entire industry of software as a service metrics that has cropped up SaaS metrics. And this was a revelation for me when I went into tech, is that nobody cared about GAAP financial statements. What we cared about was SaaS metrics. You know, kak r mrr r um, LTV, all these ratios. That's what we cared about. Because that's how. That's the new accounting. That's how you run your business. Yeah.

David Leary: [00:52:02] The older stuff was built for widgets.

Blake Oliver: [00:52:03] Right. So if you want accountants to be tracking the numbers that matter to the subscription economy, which is the fastest growing segment of our economy, teach them that. Also, when GAAP was codified back in like the 1930s, 40s and 50s, tangible assets were like 90% of market value in this country. Tangible assets, stuff you could touch factory machinery, railroads, right. We were an industrial society since the 1970s that has flipped 90% of market value of the S&P 500 is intangible assets. Stuff you cannot touch is GAAP good at valuing intangible assets? No, it sucks. And that's why you've seen the book value of companies diverge from their market value over the last several decades, to the point where what's on the balance sheet is like irrelevant to many of these technology based businesses that are changing the world. So unless we modernize our accounting standards to account for this switch in our economy from tangible to intangible assets and from selling products, physical goods to subscription services, accounting will not be valued. And thus accounting workers will not receive high salaries. Right, because the financial reports that we are putting together are just not as valuable as they used to be, because accounting is the same as it was back in the Industrial revolution. Pretty much.

David Leary: [00:53:43] Yeah, like, why would I want to pay more for somebody I don't value? Which also explains all these firms are hiring non accounting majors for a lot of jobs now. Right. They're just they're supplementing with other talent. So in general it's a little of hey everybody tell a better story. Hey colleges educate better. Hey uh firm owners treat your employees better do less hours. And, hey, state societies and national leading societies, let's get rid 150 hour rule. That's basically the recommendations, right. And all four of these should help the pipeline. Now I don't know what the next steps are. You know, you have committees and subcommittees. And a final like this is a draft report. So it's going to accept feedback then what I there may never be a finish line I don't know. But the fact that they put in words, yeah, we need to get rid of 150 hour rule. We have data to support it. It's amazing. It's amazing. Yeah.

Blake Oliver: [00:54:34] Moving to competency based licensure is where we need to go as a profession. And hopefully the AICPA takes council which is meeting like next week takes this recommendation seriously. David I know you have a hard stop. You got to get to a meeting. I want to thank everyone who joined us live. Uh, if you are listening to us on the podcast, you can subscribe to us on YouTube. Join us live search for the accounting podcast on YouTube. And don't forget, you can get free CPE for listening today. Go to Earmarked app, create a free account and you'll find the course for this episode available about a week after it publishes on the on the YouTube. So thanks everyone who joined us and we'll hope to see you around real soon. Bye everyone!