Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!
David Leary: [00:00:04] So this is a crazy numbers. A thousand taxpayers that earn over a million a year fail to file returns over multiple recent years, some owing potentially 34 billion in taxes. So basically people just don't file taxes. They just don't care-
Blake Oliver: [00:00:18] And they get away with it?
David Leary: [00:00:19] And they get away with it. They said the top 500 high income individuals who still have not filed returns for each year from 2017 to 2020. So that's three years. They have not filed returns. Oh $923 million. Coming to you weekly from the OnPay Recording Studio.
Blake Oliver: [00:00:40] Hello and welcome to the show. I'm Blake Oliver.
David Leary: [00:00:43] I'm David Leary.
Blake Oliver: [00:00:45] David, I had a really great customer experience the other day. A great user experience.
David Leary: [00:00:51] An accounting firm?
Blake Oliver: [00:00:52] No. At a parking lot.
David Leary: [00:00:55] A parking lot. That's right.
Blake Oliver: [00:00:57] But no, I mean, usually paying for parking is not an easy thing these days. Don't know about you, but every time I go to a place that has some sort of digital pay for parking system. Right. We don't have the. You don't put coins in the meters anymore. Like it usually doesn't work very well. Like the coins were easier. You know, examples are in LA. You put your credit card into the parking meter and you can never read the screen because the screen is all washed out because of the sun. The sun. Right. And you never know how much parking you have left. Or then there's these like centralized parking systems where the whole lot is just got one machine at the end of the lot and you have to go over to that lot. You have to remember your license plate number, put your license plate number into the machine and then you forget your license plate number. So you have to go back to your car and then you have to go back to the machine and then you have to go take the piece of paper from the machine and put it back in your car on the dash. You know, it's just like terrible. And so actually, have you got.
David Leary: [00:01:49] The apps right? There's all these apps and you're like, I have to do I really trust this app is a real app. I'm going to put my credit card for $3.
Blake Oliver: [00:01:56] Yeah, you got to download an app just to pay for parking and you got to sign up and create a login. And it's just so, so much friction. And I was in Phenix and I had an experience that was the easiest ever. And here's how it worked. It was so simple. Everybody should do this with their parking lots. There was a sign like on the wall and it said, Text this number. Like just text this, text this word to this number. And then it texted me back and it said, Great. Click this link to pay for your parking. I click the link takes me to a web page. I put in my license plate number and I can put in my payment information, right? And then it just starts charging me. And I don't have to say how long I'm going to be there. It just checks me in to that parking lot. And then when I leave, I just use the same link to stop the charge, to like stop the time. So the meter is all accessible via a link in text so I don't have to download an app, I don't have to go use a machine. It's all on my phone.
David Leary: [00:02:56] Yeah. And you don't have to. And hopefully that QR code you scanned is like legit. It takes you to a proper site. Yeah, but you've really eliminated walking back and forth, memorizing things, you know?
Blake Oliver: [00:03:09] So this goes to accounting practice management software. Any developers listening? Figure out how to make it so that clients can upload documents via a link in text so they don't have to download an app. It just takes them to a mobile optimized website where they can then respond to questions. They can upload documents, let clients text with their accountant, and if they want to download the app, then you could bring that experience into the app via the link, right? But don't force them to do it. It just creates friction.
David Leary: [00:03:41] So yeah, because yeah, it adds eight steps for you to pay. All you want to do is pay for the parking. Yeah. And not have all those other steps.
Blake Oliver: [00:03:49] And just like a client, all they want to do is upload their W-2. They don't need to download an app and create an account to do that securely.
David Leary: [00:03:56] It's actually funny. I have a I want to I don't want to deep dive or go down app news, but CPA charge, they had an announcement this week that they're they're now adding the ability to invoice directly through the through their app to send the clients and the client can pay it right But up to this point, I've had this experience with three different firms, with CPA Charge, you know, the CPA charge Webb to pay. They have a place for you to pay, right? It's basically an empty screen and it Fields says Enter invoice number. So then I got to go find the invoice and get the invoice number. Then it's like, enter your customer number. Then I got to go find a different email number by customer number. Then I got to type in the amount. Yeah. And to, to create. And I couldn't believe like I was just shocked people put and CPA charge that's the experience. But now CPA apparently this week launched some new features to eliminate that friction. If you ask me, it ties back to what you're saying.
Blake Oliver: [00:04:43] Every paper invoice, every digital invoice should have a QR code on it and a link in case somebody can click it, but a QR code and you just scan the QR code and it takes you to the page where you can enter your payment information and pay and it all syncs back to the invoice. Like, why is that so hard?
David Leary: [00:04:58] I always imagined I'd want to give people a pay page, pay your invoice and there's like 20 buttons. There's like a PayPal button and Amazon button, Apple Pay button, like 50 ways to pay like, like I don't care. Just pay me. Yeah, here's, here's all the buttons you could raise. You could pay me.
Blake Oliver: [00:05:13] So we're done ranting about products. Let's talk about the news. Right. We got so much to cover today. My top story is how Trump defrauded banks. According to the judgment by the judge in the case of New York versus Trump. And I've been digging into it. I'm eager to talk about that. I also have a story about the top cities to be an accountant. The top.
David Leary: [00:05:37] Cities can't wait.
Blake Oliver: [00:05:38] To hear to be an accountant. You may be surprised. David, what's on your agenda?
David Leary: [00:05:43] We can quickly touch on the government shutdown. There's a little bit more news about that as of this morning at 5 a.m. and the IRS revolving door, there's a hearing for a new IRS counselor for their head of head of chief counsel. And in that hearing, a bunch of crazy numbers came up about millionaires and their taxes. And the other big one was. I just blanked out.
Blake Oliver: [00:06:07] Well, that's all right. We'll get to it.
David Leary: [00:06:08] Gun companies. Yeah, that's right. Oh, yeah, yeah, yeah. And Chase pressured into it not to serve gun companies.
Blake Oliver: [00:06:13] Interesting. Well, remember, we talked about that a while ago where the credit card companies were adding in like a charge code, a new code, merchant code specifically for gun sellers. And this was it was we were anticipating that this would be used to basically prevent them from using traditional payment, credit card payment rails by a lot of firms like exclude them. Right. So let's dig into our stories. Do you mind if I start with Trump? Good start. You know, that's the big news, right? So, yes, this was the big story all over the Internet, all over all the news sites. A judge has ruled that Donald Trump defrauded banks and insurers while building his real estate empire. Judge Arthur Engoron ruling in a civil lawsuit brought by New York Attorney General Letitia James found that Trump and his company deceived banks, insurers and others by massively overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing loans. And I was curious like what exactly what exactly how exactly this happened. Right? What was the nature of the financial statement fraud And the one bit of news that that got picked up all over the place was my favorite part in the story, which is the size of Donald Trump's.
David Leary: [00:07:42] Oh, gosh, I don't know. What should you say next?
Blake Oliver: [00:07:43] Trump Tower. Triplex apartment.
David Leary: [00:07:45] Trump Tower. Yeah.
Blake Oliver: [00:07:46] Yeah. So. So. So. Trump's personal Trump Tower triplex apartment was valued at up to 327 million in financial statements from the Trump Organization. It is just under 11,000ft², four feet shy of that 10,996ft². Trump falsely claimed that it was 30,000ft². That's three times bigger than it actually is and inflated the value as a result. Like pretty hard to get around that fact. The Seven Springs estate in Westchester County was valued at $291 million in statements, despite appraisals of 25 to $30 million for the property. Aberdeen Golf Course in Scotland was valued assuming 2500 luxury homes could be built when local authorities had only permitted 1500 homes with severe development restrictions. Another size inflation. Their valuations for properties like 40 Wall Street and Trump's stake in Vornado partnerships were inflated by hundreds of millions compared to appraisals. And basically that's the gist of it, is that a lot of these properties were given values in financial statements issued by Trump to support loans for banks to apply for loans that were way, way inflated. Is it.
David Leary: [00:09:11] Criminal to. Do this when you apply for loans. I mean, I guess you're kind of defrauding them. But at the same time, don't they have don't these banks do due diligence and be like, oh, by the way, we checked into the the laws in that city and they're not going to let you build those mini houses. Well, guess.
Blake Oliver: [00:09:26] You know, the banks either didn't do it or they didn't care. Right.
David Leary: [00:09:30] So what how much money, at what point how many millions have to take place before you do due diligence? I'm always shocked at these numbers just are so big and it feels it never feels like there's due diligence. In the meantime, you can't park a car without, you know, without a passport these days.
Blake Oliver: [00:09:48] Look, I'm just. I'm just. What I want to do with this story is just talk about what the judge said. Okay. So the judge this you know, the judge is saying that Trump made false financial statements, claims, and that is a crime. Now, this wasn't a criminal. This isn't a criminal case. It's a civil case. So nobody's going to go to jail for this. But there are consequences and we'll get into that. I before I do that, though, I want to get into some other issues with the financial statements. And that's what really got my attention about this is like the false falsification of financial statements, right? We're accountants. So so there was a false classification of non liquid assets as liquid cash. According to the judge. Specifically, Trump had a 30% limited partnership interest in Vornado entities, Vornado Vornado entities that own buildings. As a limited partner, Trump had no right to use or withdraw funds from the Vornado partnerships. Nonetheless, Trump's financial statements classified as 30% Vornado stakes totaling tens of millions of dollars as cash or liquid assets. And they were liquid pretty clear there. So that is a material misstatement and was done to mislead recipients of the financial statements about his true financial condition. Now, if they were a public company, right, this would be SEC fraud. Like people would be going to jail for this. Right. But they're a private company.
Blake Oliver: [00:11:12] The evidence also showed that from 2013 to 2020, Trump's financial statements applied a 15 to 30% brand premium to the valuations of certain Trump branded golf courses like Trump, National Golf Club and Jupiter and Trump National Golf Club in Los Angeles. This added tens of millions of dollars in value attributed to the Trump brand name. However, the financial statements also expressly stated that the goodwill attached to the Trump name has significant value that has not been reflected in the preparation of the financial statement, so they added it to the value of the properties. But then they said in the financial statements that they had not done that. Now, here's the consequence of all this is the judge basically said the judge canceled the business certificates for a bunch of entities controlled by the Trump Organization, the Trump family, the Trump Organization, Inc, the Trump Organization, LLC, DJT Holdings, LLC, Trump Old Post Office, LLC. I think that's the one that holds the hotel down in Washington, DC. Like all of these are now going to be dissolved. And so Trump could lose control. The Trump Organization could lose control over these properties. I mean, they're not going to lose their ownership interest in them, but they could lose control. Yeah. So now some other stuff is going to go to trial. But that's that's the main thing. Yeah.
David Leary: [00:12:26] Just just making up financial statements. Yeah.
Blake Oliver: [00:12:28] I mean, the question is to like, what is the financial penalty going to be, right? Because Letitia James is looking for hundreds of millions of dollars or at least tens of millions. I think it might be over 200 million in penalties. And that's going to be the big question is will there be financial penalties for this? The banks that were involved in this that are mentioned in the decision include Deutsche Bank. They were a big lender to the Trump Organization. They received false financial statements related to loans for properties, Ladder Capital and AXA Financial. They provided insurance coverage. An AXA employees were indicted in Manhattan for facilitating suspect valuations. That's insurance fraud there. So that is your summary of the financial fraud in the Trump New York State case.
David Leary: [00:13:14] Financial fraud. I guess you're talking about banks. You want to jump into the Intuit pressure? Yeah, guns.
Blake Oliver: [00:13:20] Let's talk about that. So you said Chase and BofA were pressuring into it not to work with gun. Was it gun companies or gun sellers? What?
David Leary: [00:13:28] So in general, right, if you think about all of us with the clients, right, there's merchant services and the merchant services companies all have a list of things you're not allowed to use the merchant terminals for. Cannabis is a great example, right? That's why all those cannabis businesses are cash because they can't get credit card terminals. Right. For Mastercard, Visa, Mastercard. Well, Senator Ted Cruz, one of his constituents, reached out to him. And this all took place around August 1st, behind the scenes. So Ted Cruz wrote a letter to into it about being banned this this this owner of a gun store. And he was just banned blindly. Well, in this letter, I'm going to read this part of the letter. When my staff approached Intuit about this issue, your company explained that its banking partners, J.P. Morgan and Bank of America, demanded that Intuit create and enforce bank policies regarding firearm sellers and manufacturers. After my staff met with those banks, Intuit clarified that Bank of America required it to prohibit gun manufacturers from using QuickBooks payroll services, while JP Morgan required Intuit to restrict gun sellers from using QuickBooks payment processing services. Now, JP Morgan acknowledged that indeed was the source of Intuit's payment processing service services policy restricting firearm sellers. Bank of America, however, denied that it ever given Intuit any instructions related to firearm manufacturers or sellers. Intuit insisted that Bank of America did so. There's a little infighting up at the top levels there. And so as of August 1st, the gun provisions have been removed by Intuit. So if you are if you're a gun store, gun manufacturer, you could use QuickBooks Merchant Services and QuickBooks Online payroll as of August 1st.
Blake Oliver: [00:15:11] Okay.
David Leary: [00:15:12] So it's funny because this reminded me of a podcast I listened to about a year ago called Hot Money, and it's chasing like who runs all the money in porn? And it's all tied back to Visa and Mastercard and what they're doing. And ultimately what they're doing is they they dictate what's acceptable and not acceptable. Like, oh, David, on your Onlyfans page, you're allowed to do these types of sexual acts and this guy over here can't do these. Like, they're determining what we can and can't do as a policy credit card for the world Payment.
Blake Oliver: [00:15:46] Payments Rails dictate speech. It's sort of like political money, too, right? It's like if you can't get the money, then you can't speak your First.
David Leary: [00:15:57] Amendment's true for political views. Do you remember the Canadian They had the truckers protest about a year ago? Yeah. And they shut down all the Venmo donations. People were sending them Venmo. They shut all that down. Intuit themselves with MailChimp. In 2021, they shut down a Second Amendment rights company, turned off all their accounts. Right. And then I've heard a story from I've heard this from accountants because this becomes a nightmare where you might have a client that has 5 or 6 legit business entities, but maybe they have this other thing on the side that will shut down and they own a gun store. So I have a Burger King and McDonald's. I have all these businesses. It'll shut down all their merchant services for the whole thing. Yeah. So there's risk to your clients and this and then sometimes stupid stuff.
Blake Oliver: [00:16:41] Always have multiple merchant accounts. Yes.
David Leary: [00:16:44] And then it's also stupid stuff I've seen and I've gotten this call on my cell phone from an accountant whose client got denied for paying bills because the accountant bought nitrous oxide, which is laughing gas. But that's on a list of like dangerous goods somewhere else. And because of that, all the merchant service and all their payment stuff got shut down. They couldn't pay their other vendors because they couldn't buy nitrous oxide. So this is it's just something to be very aware of that like. These policies because people sometimes get mad at into it and it's being driven by the big players. It's Visa, Mastercard, JP Morgan Chase, Bank of America. They're deciding what we are allowed and not allowed to do as citizens to some extent. It's crazy.
Blake Oliver: [00:17:23] Well, David, since you brought up payments, I've got a fun video to play for you. And before I do that, I want to welcome all of our live stream viewers. Thank you, Christopher, Tino, Brandon, for chatting in. If you have thoughts on what we're talking about, you can heckle us. You can add your commentary. We see it all coming in from LinkedIn, from YouTube. We don't see the Twitter, but we see LinkedIn and YouTube comments here. And we'll we'll we'll we'll read them. We might even put them up on the screen there. And if you are listening to the podcast feed of this and you want to see our faces, you want to interact with us live, we go live on Fridays and you can subscribe to our channel on YouTube, the accounting podcast, and you'll get notified. It's usually around 10 a.m. Pacific, a little after that. We don't always make it right at the top of the hour. We love to hear from you and we want to know what's top of mind for you. So do let us know. The accounting podcast on YouTube and we just broke the 2000 subscriber mark since we started doing it. I think earlier this year was the first time we really started doing this. So thanks, everyone. All right. So this is a video. From 19, I think it's 1996. This is a guy at Burger King and it has something to do with payments.
Burger King Clip: [00:18:41] All right. Let me see. What will it be? We're here to go. Oh, would you like ketchup on that? Well, larger small fry.
Burger King Clip: [00:18:51] Cash or credit?
Burger King Clip: [00:18:52] What?
Burger King Clip: [00:18:53] The home of the Whopper is offering Cash or credit?
Burger King Clip: [00:18:57] I think it's pretty bad if you have to use a credit card. When you go to a fast food restaurant for something as little as $3.10, if.
Burger King Clip: [00:19:03] I use my GM card, I get a 5% rebate. If I eat here long enough, I'll be able to buy a pickup truck.
Burger King Clip: [00:19:09] Burger King bosses say workers won't have to figure out how much change the customer gets back.
Burger King Clip: [00:19:14] I just hope it doesn't slow things down at the cash, cash and carry that people are going to be having to call New York and get get the confirmation or whatever it is. Because when I want a whopper, I want it now.
Burger King Clip: [00:19:25] Just another way to spend money. I'm sure it'll work for people on vacation when they don't have to do something. But I can't imagine it working on a day to day basis here.
Burger King Clip: [00:19:32] So far, the smallest credit has been for $2.50, the largest just over ten. Jamie Costello, News Channel two.
Blake Oliver: [00:19:41] So that was actually 1993. So it's been 30 years since taking a credit card.
David Leary: [00:19:48] I worked at Burger King in 91.
Blake Oliver: [00:19:49] So let's see who posted that. That was W. Wmar two news on Instagram doing a flashback to their reporting.
David Leary: [00:20:01] And now a lot of fast food places. We've talked about this previously on the show. Are getting rid of cash completely. You have to use credit cards. Lots of.
Blake Oliver: [00:20:09] Places. Going back to the Trump story. Brian asks, I don't understand how Trump could get a loan and they didn't Look at the values which accountant gave Trump's bank a comfort letter? Probably Allen Weisselberg, the Trump CFO who was, you know, pled guilty to a bunch of stuff. Yeah, well, I think, you know. Let's just let's just say it like it is. A lot of these banks don't do proper due diligence on celebrities because they think, well, these people are famous. We're going to get our money back. We don't need to actually, like take you know, we don't need to actually do the work we're supposed to do. The same thing with, like financial analysts, too. I don't think a lot of them read all the financial statements. Like, do you really think that like the guy at Chase, who's like 26 doing financial analysis, actually read all the SVB financial statements? I doubt it.
David Leary: [00:21:01] Finance, bro. Yeah.
Blake Oliver: [00:21:02] I mean, this is this is the world of finance, bro. It wasn't an accountant. Oh, well, it wasn't an accountant who gave out the loan. It's a loan officer. Right. So, by the way, we had somebody ask for your onlyfans page. David So you might need to spin one up if you don't have it or your secret onlyfans page, you have to hit me in.
David Leary: [00:21:20] The DMS, slide in my DMS and slide.
Blake Oliver: [00:21:21] Into your DMS. You want to you want to talk about the top cities to be an accountant? Do you want to. You want to take a guess at what the top cities to be an accountant are?
David Leary: [00:21:32] Already saw the list. So I'll let you. I'll pretend I didn't. And I'm going to be really surprised.
Blake Oliver: [00:21:37] Okay, cool. This was a story in Forbes advisor. Whether you're pursuing an online accounting degree or you've already graduated, you may be wondering which cities offer the best prospects for your accounting career. In this article, we'll explore 99 best places in the US for accountants to develop their careers. Keep learning. Let's see, what was the criteria for this?
David Leary: [00:21:59] There's a table lower on the page. I think that they it's like a spreadsheet table and they compare number of firms, number of businesses, you know, salaries.
Blake Oliver: [00:22:09] So here's the top cities. Number one, Salt Lake City, Utah. Accountancy jobs are growing particularly fast in Salt Lake City. Known as the crossroads of the West, this metro area boasts prime winter sports destinations, a burgeoning tech industry and the nation's largest number of industrial banks. Utah's capital city, Salt Lake, leads the state's strong economic growth with a gross domestic product increase of nearly 300% from 2001 to 2021. There's branches of all the big four accounting firms, and the median income is 82,506. Projected job growth for accountants statewide is 33%. So not bad. Number two, Miami, Florida, with a projected job growth for accountants of 23% and a median income of 62,870. There are 1100 multinational corporations in Miami, so if you want to do international business, that's a great place. Number three, David, Tucson, Arizona.
David Leary: [00:23:12] Made the list.
Blake Oliver: [00:23:13] You made the list, 22% projected job growth for accountants statewide. By the way, these growth projections are from 2020 to 2030. Median income 59,215. You get that sunny climate, you get lots of science and engineering jobs. Top industries include aerospace and defense, renewable energy and optics and photonics. What is photonics? No idea. Tucson's largest employer is David.
David Leary: [00:23:43] Oh, it's a Raytheon Missile Systems. Yeah.
Blake Oliver: [00:23:46] You want to build. You want to. You want to account for weapons? That's pretty cool. Number four, Little Rock, Arkansas, 12% projected growth in accounting jobs, Median income, 58,441. The median home price is the least expensive on their list, and the low overall cost of living indicates that the city's accountants may see their salaries stretch further than they would in many other cities. Lots of opportunities in banking and finance, health care, agriculture and government. And the fifth one on the list is Tulsa, Oklahoma. 12% projected job growth for accountants, median income 60,866. You've got below average housing prices, plenty of economic development programs in recent years to spur growth. There is a program called Tulsa Remote that is designed to attract remote workers. So if you are a remote accountant, if you want to work from home, that could be good. I think that's one where they pay you to move there, right, Like Vermont used to do. Lots of opportunities. Industries such as energy, aerospace, manufacturing and transportation. There are branches of all big four firms. And the full list is accessible on the Forbes site. We will link to that in the show notes. So it looks like the way they rank these was number of offices, number of tax prep offices, number of other accounting establishments. So basically the number of firms that you could work at, the number of business establishments, CPA offices per 1000 business establishments and tax prep offices per 1000. You know, basically, like how how competitive is it, the median income and median home price and then rent and unemployment and then the definition of a living wage. So it looks like a combined ranking of those things. Shall I go through the the rest of the top ten real quick? We've got Honolulu at six, Springfield at seven. Denver at eight. Albuquerque at nine and Oklahoma City at number ten.
David Leary: [00:25:53] We're just to scroll down. Where's New York City Fallen in? Where's LA? Fall in. Just for perspective. Is it even? Unless they only show the top 25in.
Blake Oliver: [00:26:00] That New York 72. 72. So this is funny, right? Because everyone's like, oh, I got to go to New York. I got to go to.
David Leary: [00:26:07] New York in Boston. Right. Are the big.
Blake Oliver: [00:26:09] Yeah, I got to go to Los Angeles. Los Angeles is 41. It's because of the cost of living. You know, if you're an accountant, accounting is not a job you get because you want a high salary. It's because you want the job security. And I think if you want the job security, you probably want to be able to buy a house, too. So go someplace where you can actually afford to buy a house. Right. Chicago 61.
David Leary: [00:26:30] Work remotely.
Blake Oliver: [00:26:31] Right? Yeah. Huh. Well, you know, I was talking about Trump earlier, and I know Trump supporters are going to be upset if I'm not fair and balanced in my coverage. So the good news is we have plenty of corruption on both sides of the aisle this week. Yes. And and and it resulted in the funniest headline I've ever seen in The Wall Street Journal. Yes. I kid you not. There was a funny headline in The Wall Street Journal that headline is the right amount of cash to keep at home for emergencies. Hint not $480,000. Yeah. So for those of you who missed it, this is one of the best fraud stories I've ever heard. Senator Menendez from New Jersey, his home was raided and the feds found $480,000 in cash in his house, like sewn into jackets with his name on them, like hidden all over the place. I mean, the guy's saying that he didn't take bribes, but why else would you have $480,000 just sitting around in your house?
David Leary: [00:27:42] But wasn't he convicted once before in the past?
Blake Oliver: [00:27:45] I think he got away with it in the past. Right. He's he's been.
David Leary: [00:27:49] They found not guilty or he's been.
Blake Oliver: [00:27:51] Implicated in the past. Yeah. Oh, they also found gold bars in his house. Right. So Wall Street Journal did the smart thing, which is rather than writing a cajori old man sounding yelling, you know, on his lawn kind of opinion piece, they got these two writers and Ferguson and Jeremy Olsen to write a personal finance piece about how much cash should you have at home for emergencies. Do you really need $480,000 at home? David. Well, I probably shouldn't ask you this in case you do have lots of cash at home, because, you know, somebody listening might decide to rob you, but I'm going to assume you don't have massive amounts of cash at home.
David Leary: [00:28:36] No, And I've thought about it a lot. I've said like every week I should put like, oh, or every other week, put a 50 or $100 bill, you know, in the safe and just just in case there's another pandemic again. Or who knows, Right? It never happens. There's no cash in the safe whatsoever. Yeah.
Blake Oliver: [00:28:52] Uh, so. So I don't keep I barely have enough cash, like, in my wallet to pay for something if my credit card doesn't work, it's, like, dangerous, right? So when I travel, I have to take cash out of the ATM just in case I take, you know, 100 bucks out. Um, so. You know, how much should you keep? Experts suggest, according to The Wall Street Journal's research, that you should have two weeks to two months of living expenses in cash at home. Now, I don't know about you, but two months of living expenses in cash would be like thousands of dollars. Guess. Guess. I guess that doesn't count. The stuff that you pay out through your bank account automatically, Like your mortgage and stuff. Right. Because I couldn't. I wouldn't. I wouldn't want to have, like, enough money to pay my mortgage sitting at home in a safe. So I guess I guess it's talking about like your, you know, living expenses. So they suggest having 2 to 2 weeks to two months of living expenses in cash at home. This ensures access to money of ATMs and credit cards don't work. People in hurricanes. Yeah, you probably.
David Leary: [00:29:50] Should keep enough for like a plumber. Like what if a plumber is like, I only take cash and like, you're in a situation, you should at least keep enough to pay a plumber. That's probably the wisest.
Blake Oliver: [00:29:59] Yeah, it should be. So if you live in a hurricane or wildfire zone, you may want to have more cash available. Like. Like when we lived in Florida. You know, hurricanes are a regular thing there. You want to have cash because if you can't take credit card, you still want to be able to buy, you know, your your gas or you want to be able to buy food for several weeks. The problem is storing large amounts of cash at home invites theft. So you should keep the money in a fireproof safe and split it up in different hiding spots. Having an emergency fund with 3 to 6 months of expenses is still recommended, but that should be in an interest bearing account, not cash at home, especially when interest rates are rising. Yeah, most Americans don't need nearly as much as the $480,000 found in a senator's home. The key is having enough accessible cash for basics like food, shelter and repairs in a disaster, while keeping the bulk in an emergency fund. In secure accounts. A few hundred to two months of expenses is recommended based on personal circumstances.
David Leary: [00:30:58] I know why he did it. Right out of the cash. They're like, It's because the government's going to shut down. And if you're a government employee, you don't get a paycheck. You need access to some cash. Like this is this is the reason he was doing this. It was truly his emergency fund.
Blake Oliver: [00:31:16] Yeah, but but you told us last week, David, that the senators and Congress people still get paid. They still get paid. Exactly. That is messed up. That is messed up.
David Leary: [00:31:28] But there was breaking news this morning. At 5 a.m., our friend Kelly Phillips Erb wrote a blog post or an article on Forbes with the latest. So they're saying so this is as of 5 a.m. this morning. She's saying now the plan is two thirds of the IRS is going to shut down. If the government shutdown happens, which I think is today. Right. Because today is Friday and there's no more days left. So it's probably going to happen. With that said, she gets into a little. They're going to one third. So 30,000 will still perform services. So the commissioner stays. Some people at the Tax Advocate Service, 3000 criminal investigations will stay. 5000 it related workers. The one that was a little confusing and asked Kelly to clarify it. It says 10,000 customer service representatives will remain in place to handle phones and paper service issues. But it was like noted that only if the shutdown happens during filing season. So I asked Kelly, like, can they clarify what filing season is? Does this mean on October 16th they shut down the phones? Does this And she said that probably means through January, end of January. They keep the phones open, then shut them down. Now. Let's play a game and I'm going to share a graph here. Share my screen.
Blake Oliver: [00:32:42] Okay.
David Leary: [00:32:43] With our listeners here. So this is a chart of the previous shutdowns. And as you see over time, the shutdowns keep getting longer and longer and longer because our politics, like you just covered both sides of the aisle, are more divided than ever. So the last shutdown was 50 days. Let's see.
Blake Oliver: [00:33:03] 35, 35 days. But before that, the longest shutdown had been 21 days under Bill Clinton.
David Leary: [00:33:09] 21 days. So let's play a little game and we have our live audience here. How many days do you think this is going to go on for when this shuts down, which it thinks it looks like it's going to shut down? And while you're doing that, I'll just kind of frame up some numbers for you for perspective. They own the house only has 24 sessions in the next 90 days. And to put that in perspective, they had 12 in July, zero in August and 11 in September. And if you look at the calendar, you've got some holidays in there. When are they going to resolve this? So is this going to be yeah, 50, 90 days? Is it going to roll to the after the first of the year? Because before they let it roll over Christmas and New Year's? Right. So what are people's guesses.
Blake Oliver: [00:33:53] Christopher in the chat said two weeks top. Two weeks, tops. I think that the fact that that the tax deadline, the individual tax deadline is coming up could actually put pressure because that will seriously affect people if the IRS is, you know, two thirds shut down.
David Leary: [00:34:11] Will you still have to file? They don't care. They're not extending the deadline.
Blake Oliver: [00:34:16] David Hall says zero days every year has last minute deals. Worked out this same topic every year for federal employees. Brian says 11 days. James says 69 days.
David Leary: [00:34:30] I'm coming at the 45 to 50, I think, in my brain.
Blake Oliver: [00:34:32] Do you think we're going to set a record? Is it going to be like the Phenix? The Phenix Temperature record, 5050 something days of 110 degrees? More than 110 degrees.
David Leary: [00:34:43] Just when you look at the calendar, you're like, they don't work enough to solve this.
Blake Oliver: [00:34:47] David says. David Scully says 47 days GOP leadership in disarray and nobody wants to pay the price to defect, to join Dems to get anything done. Tino says less than 30 days, Linnell says 30 days. All right, we've got our survey complete, so there's quite a range anywhere from 0 to 69 days. Hey, you mentioned Kelly Richmond Pope and I saw a video featuring Kelly Richmond Pope.
David Leary: [00:35:16] Why was Kelly Phillips Erb?
Blake Oliver: [00:35:18] Oh, that was Kelly Phillips.
David Leary: [00:35:20] Erb Kelly. Sorry.
Blake Oliver: [00:35:21] Another Kelly, then another Kelly. Yeah, I got.
David Leary: [00:35:24] You mentioned Kelly Richmond Pope.
Blake Oliver: [00:35:25] Well, so, Kelly, it was the three names that got me.
David Leary: [00:35:29] Oh, that's.
Blake Oliver: [00:35:30] Kelly Phillips Erb Kelly Richmond Pope. Well, so different. Kelly was featured in a video by the Bigthink on YouTube. This is a general knowledge educational channel. It has 41,000 views. And the title of this video is More Accountants are Leaving the Field than Joining What's Going On. More mainstream coverage of the accounting talent crisis. This video is about four minutes long. We're not going to play the whole thing. I just want to play the beginning because it's really well produced. What would the world without accountants look like?
Big Think Clip: [00:36:09] What would the world without accountants look like? I think it would be the wild, wild West in business. When you think about what an accountant does, a CPA does what an auditor does. They're the ones that are telling you, You can trust me, you can invest with me, you can lend to me. An auditor gives me assurance. If they go away, who can you trust? This is really not a far off question because when you look at the data, just in the past two years, 300,000 accountants have left the field. That's a huge, huge number. There are less students choosing accounting as a major. There are less students sitting for the certified public accounting exam. There are more people retiring out of the field that are coming into the field. Who's going to do your tax returns if you don't have any CPAs or accountants? I think what's changed is the way we work. We didn't predict the growth in other areas. So many professionals that might have once majored in accounting have gravitated to these other fields. We would have never known that social media would be a major, that ESG would be a major, cybersecurity would be a major. A lot of the IT jobs would be what they are today.
Big Think Clip: [00:37:31] We probably took our eye off the ball a little bit, and now we're playing catch up. One of our hindrances, we have something called the 150 hour requirement. If you major in accounting, you have to have 150 credit hours before you can sit for the CPA exam. And so that has made college longer and more expensive. There's a lot of kids that go to graduate school and they want to get their MBA. But now what you're having to do is you have to go to graduate school, get a master's in accounting, and if you want to go get an MBA, you got to go back to graduate school to get that. Things are going to have to change in order to appeal to a group of Gen Z learners that want to work differently. So what we've seen is organizations really starting to pay for that fifth year of college, offering scholarship dollars for students to go back, stay in school, will pay for your fifth year, will pay for you to sit for the CPA exam, will pay for your study materials. We just want to get you through. So you're starting to see organizations push to help students in a way that you didn't see in the past.
Blake Oliver: [00:38:36] So go ahead, David.
David Leary: [00:38:38] Can you wrap? I agree. It's really well done. It's very clearly communicated. But who's the target Like who's seeing this video? Who are they pushing this to or what's the context around the video?
Blake Oliver: [00:38:48] I mean, it's the big think YouTube channel with 6.1 million subscribers. And so it's like.
David Leary: [00:38:55] A YouTube channel. I've never seen this channel. So it's a YouTube channel that they just bring big ideas, different ones every week or so.
Blake Oliver: [00:39:01] Yeah, it's like that kind of those kind of think pieces.
David Leary: [00:39:04] Okay, so people who are like the people that think of themselves as deep thinkers and they like to see big world problems, they tune into this channel and now we've we've reached that level.
Blake Oliver: [00:39:13] Yeah, it's reached general consciousness here. Yep.
David Leary: [00:39:17] This is related. We could just look at the graph. I don't to talk about the story, but this was bouncing all over social media this week. Probably you probably saw this the the graph of people with six years of experience more leaving the accounting.
Blake Oliver: [00:39:29] Industry six years or more. Yeah it's it's skyrocketed.
David Leary: [00:39:34] It's unbelievable.
Blake Oliver: [00:39:35] Almost over 80% approaching 85% of the people who left in the last 12 months had more than six years of experience.
David Leary: [00:39:45] And we don't have to we don't have to get into it too much. So I don't want to derail. We have a lot of stuff to talk about. We do. And I think we have an interview coming up and we'll have a whole nother episode even more on 150 stuff. But it's so it's just public knowledge now. It's amazing how this is. Again, Wall Street Journal. I just want.
Blake Oliver: [00:40:00] To point out one of the comments on the big Think video. Okay. This is this is the top comment. I'm a CPA. I'm hoping and praying the trend continues. Hopefully this decline in supply partially offsets that decline in demand caused by continuously improving accounting software. It's already putting a lot of accountants out of work. I could see a future mastering accounting principles relatively easy since they are logic based and this is my least favorite response to the shortage of accountant trend is people saying it makes my CPA more valuable. I'm going to get paid more. Well, guess what? So far it hasn't led to you getting paid more. It's just led to you doing more work and being overwhelmed and not getting paid more, but having worse quality of life. So I my my worry is that if you have too few CPAs. The market will decide we don't need CPAs anymore because they're too expensive, they're too hard to find, and they're going to take away our monopoly on the one thing that we have a monopoly on, which is audit. Right audit will go will be given to others, it'll be opened up to others. And that's how the CPA dies. If you don't if you don't produce enough product to serve the market, the market will go elsewhere.
Blake Oliver: [00:41:26] And so this is a short, short term thinking also. It's not like it's not it's very selfish thinking as well. I mean, come on. Like we are accountants, we are CPAs. We are supposed to protect the public interest and we are failing to do that. Audits are failing to protect investors. The quality has declined. The usefulness of financial statement information has declined over the last 100 years. It's gotten more complex, more expensive. It hasn't gotten better. So this is extremely selfish. Another comment here. My mom is an accountant. She said she wouldn't pay for our college if we majored in accounting. I got my degree in accounting and skipped the public accounting slash CPA route. Thankfully, I work as a mid-level construction project accountant for a big real estate developer. There is no way the tasks of my job can be done by a robot, and none of my managers ever worked in public or got CPA and make well in the six figures. Yeah, it's got a lot of comments on it. I think those who are leading our profession should look at this video and go read the comments. All right. We got too much to get stuck on. 150 And the future of the profession. Let's keep moving.
David Leary: [00:42:33] I'd like to talk about the IRS revolving door.
Blake Oliver: [00:42:36] Okay.
David Leary: [00:42:37] Let's do it. Because. Because it's. That's the boring part of the story. Actually, there's an exciting part of the story. But you brought this up before. You know, people work for the Big Four. They go to work for the PCAOB. They go back to work for the Big Four. Right? And then because of that, they don't you know, they're all buddies, right? Same thing happens. People work for Big Four. They go to the IRS, they go back to the Big Four. They go back to the IRS. Well, our favorite senator Warren. So she and your best friend states representative and Democrat from Washington, Pramila Jayapal. She's a representative from the House. They wrote another letter to Danny Warfield, commissioner of the IRS, and calling this out. Right. And then the same letter similar to the letter they sent to H&R Block and TurboTax and all the all the big tax prep companies, a couple of weeks ago, we talked about that. And basically that that report between 2017 and 2021, 496 IRS employees. Right. Or 15% of the workforce came from large accounting firm or large corporate office, say that.
Blake Oliver: [00:43:42] Percentage again, What percentage of the IRS?
David Leary: [00:43:44] 15% of the workforce. Came from a large corporation or a large accounting firm before joining the IRS. During their time at the IRS or after leaving the IRS. So it's a pretty broad window like. Yeah.
Blake Oliver: [00:43:59] That's only only 15%. That's not that bad.
David Leary: [00:44:01] That is a weird number that they present it that way. But the real one that's the shocking stat with this is in this investigation, at least 18 IRS employees worked on a private letter rulings in which the accounting firm they worked for either immediately before or after the time at the IRS, were the taxpayers representative. So we have X firm, Blake, representing us. Somebody else at that firm works for the IRS. They make the ruling on our tax issue.
Blake Oliver: [00:44:30] Oh, yeah, I see. I see the problem there.
David Leary: [00:44:33] That that could be a problem. And so it's happening right now is there is a IRS hearing and they it's for a new chief counsel. Her name is Marjorie Rawlinson. And so she recently exited for as its national tax deputy leader. Prior to that, she worked as the associate chief counsel, international and deputy associate chief counsel at the IRS. After formerly working at as the principal in the firm's national tax department and National tax Director of Services, Technical co-chair of the firm's International Tax Technical Committee. So she's been bouncing back and forth, and Senator Warren called her out for this and said, Ms.. Robinson, you've gone through the revolving door more than once. You've gone from Ernst and Young to the IRS, then from the IRS back to Ernst and Young, and once again from Ernst and Young back to the IRS.
Blake Oliver: [00:45:18] David You said Ernst But it's it's Ernst.
David Leary: [00:45:21] Oh, Ernst. Sorry about that. Sorry about that. Corrected. Delete this whole thing. Start over. No.
Blake Oliver: [00:45:28] You want to. You want to do another take there?
David Leary: [00:45:30] Another take. And then she says, I think that's a red flag. So Elizabeth Warren's calling this up. But part of this they started calling out other data in this committee meeting. So the Senate Finance Committee, Ron Wyden, he's a Democrat in Oregon. He he called the other things in a different letter. So this is a crazy numbers. A thousand taxpayers that earn over a million a year failed to file returns over multiple recent years, some owing potentially 34 billion in taxes. So basically people just don't file taxes. They just don't care.
Blake Oliver: [00:46:04] And they get away.
David Leary: [00:46:05] With it and they get away with it. They said the top 500 high income individuals who still have not filed returns for each year from 2017 to 2020. So that's three years. They have not filed returns. Oh $923 million. Wow. They just are not.
Blake Oliver: [00:46:20] And then like 923, like so like.
David Leary: [00:46:24] Yeah, only 58 of the 2000 that are under active investigation have been subjected to financial penalties, liens or levies. That's it. Wow. Nobody gets in trouble. And then they said that 1.4 million wealthy tax cheats still have not filed retired tax returns. Totally amount of unpaid taxes is estimated to be $65.7 billion. But these are just crazy numbers. Rich people just aren't paying taxes. They're just blowing it messed up.
Blake Oliver: [00:46:52] It's really messed up. Going back to audit. David I want to call out a big change that the PCAOB is making under Chair Williams. The PCAOB has been really cracking down on audit firms and has approved a new rule to tighten requirements around how audit firms obtain and verify external evidence from clients. This is a huge change. It's the first major update to conformation requirements since Pcob adopted them in 2003. Under the new rule, audit firms will have to receive confirmation that stated amounts for cash and cash equivalents held by third parties and accounts receivable are accurate. They can no longer rely solely on negative confirmation and assume that silence means the amounts are correct. So, David, what that means is when the audit firm. When the audit firm is auditing cash and cash equivalents, the amount you have at your bank account. David They will send a confirmation letter to that bank. Or if they're auditing R, they will send a confirmation letter to your biggest customers. And say, here's the amount that we show that that X company that David is is saying, you know, he has on his balance sheet. Is this does this match your records? And most of the time, the vast majority of the time people just throw those letters in the trash and they never respond. And under the current rule. The auditors can take that as confirmation. So the fact that you didn't dispute it means that it must be right. That it's enough evidence that it's right.
David Leary: [00:48:33] So now I can provide a fake bank statement if they try to verify the fake bank statement and they never get a response. It must be a true bank statement. That's what's the previous law.
Blake Oliver: [00:48:45] It's kind of amazing that it was that loose. So, you know, because the problem is most of the time these confirmations, you know, don't get an answer. Now, this is a big change for that. So, you know, the question is what will happen? Like if auditors have to actually receive a positive confirmation, how are they going to do it, especially when we've got this talent crisis? I personally think it's a good thing that we should have positive confirmation, not just like negative confirmations, but then the question is how do you actually practically do it? The rule also says that you cannot rely on the internal auditors as the external auditor in selecting items for confirmation, sending requests or handling responses. So like you said, David, those fake fake bank statements, like if the internal auditor gives me some false information, right? I can't just rely on that. I have to actually do my own investigation as a as a as an external auditor. The Institute of Internal Auditors objected to the proposal as implying internal auditors are untrustworthy in response to PCB emphasized external auditors obligations rather than restrictions on external auditors. So that is a huge change to how confirmations are going to be done. I really wonder what the impact is going to be. But, you know, it seems like a reasonable thing. That's just my.
David Leary: [00:50:10] Do they give suggestions on how they would do it? Like, do you.
Blake Oliver: [00:50:12] Oh, no. You know.
David Leary: [00:50:13] Pcaob, FDIC will do it. They'll be able to make requests from the FDIC and then they'll provide the information. No.
Speaker12: [00:50:20] No.
David Leary: [00:50:22] Do you want to move from the PC AOB to a PB and J.
Blake Oliver: [00:50:26] Pb and J. My PB and J. My son is basically like 85% PB and J because that's his favorite thing. He eats one every day, sometimes twice a day. So yes, I'm curious to know what PB and J has to do with accounting.
David Leary: [00:50:43] Yeah. So I saw this was an opinion piece in accounting today by Kyle Walters. He's a partner at CPAs and Advisors, and the title of the article was What CPAs Can Learn from Schmucker's, You know, the Jelly, The Jam, right, Smucker's Jam. And just like every other company post pandemic Schmucker's, you know, had to have people back in the office. Everybody's going through this return to the office, no more remote, right? But they really went around it consciously and they figured out that they have about 22 weeks of the year where people really have to be full blown onsite. Right. But then the rest of the year, the other 30 weeks, live and work anywhere you want. They figured it out. And Kyle's argument is that we at accounting firms should think about this because we have our peak weeks where you really need all hands on deck working in the office. And I just thought it was a the real piece is about being deliberate with your work from home policy. So many people are like, Yeah, two days a week, three days a week and making figuring that that model out is really interesting. I don't know if you saw the article, if you had thoughts.
Blake Oliver: [00:51:50] Well, I do have some thoughts. So they're saying it's like a week on and then a week off because it's 20 weeks a year in the office.
David Leary: [00:52:00] Well, I don't think it's every other week.
Blake Oliver: [00:52:01] Well, it's certain weeks, though. Like it's designated weeks where you have to be in the office.
David Leary: [00:52:05] Maybe before school starts. They gotta make more jelly and peanut butter. I don't know.
Blake Oliver: [00:52:09] Right. Okay. So to me as a parent, I would find this difficult because my schedule is around every day. So I need to know week to week, like the same days, like when I can pick up my kid from school or not. And if I have to be in the office for a week and then off for a week and then in the office for a couple of weeks and then off, I can't arrange that. That doesn't work for me. So. It also limits how far you can live from the office, because if you're going to have to commute every day for a week or two, you know, living two hours away might be impossible. Whereas if you knew you only had to go in 1 or 2 days a week, you could make that trade off. So I'm not I'm not so hot on this idea personally. I mean, I can see why. I can see why management would like it, because when people are there, they're really working. So you have like these sprints basically as a company. And I assume this is management, right? This is not the factory workers.
David Leary: [00:53:13] Because I think we you know, we have these you have January, you got the deadline, you know, December, October deadlines. So I think this is happening naturally. Yeah. But it's like, how do you make it to where? Why still make somebody in those slower times? Why make them come in at all? Yeah, maybe. Maybe that's the way to view this.
Blake Oliver: [00:53:32] Let's pivot to AI, shall we? In the time we have left, Amazon has invested $4 billion on anthropic cloud, the chat bot platform rivaling ChatGPT and Google's Bard. This was reported in VentureBeat. I am a big user of cloud and proponent of cloud. I find it to have the best natural tone and writing of any of the AI's better than ChatGPT and it was the first one to allow you to upload large PDFs. So I've been using it to analyze legal decisions and to put an entire podcast transcript into cloud and create content. So Amazon is investing in anthropic. This bodes really well for Alexa. Oh, I didn't set her off. Okay, good. Yeah. So Microsoft invested $10 billion in OpenAI. Now Amazon is investing 4 billion in in cloud. I think this is really good news for anyone who is on AWS for your products because the partnership is going to give anthropic access to cloud computing capabilities to help build and scale cloud. And in return, Anthropic is going to make Cloud's foundation models available on Amazon's bedrock platform. So most of the startups in our space are on AWS, and now they're going to have access to cloud on AWS powering their apps.
David Leary: [00:54:56] That makes it that's really a competitive advantage because so many, especially in our space, so many of the startups, I'd say if you go to the QuickBooks App Store, 90% of all those apps are running on AWS.
Speaker12: [00:55:10] Yeah.
Blake Oliver: [00:55:11] It's the it's the number one platform, right? Azure is after that by far. Yeah. Yeah. And so basically now and Azure companies are going to have built in like API kind of stuff for like ways to use these generative AI tools. Here's another story. The Pentagon budget is so bloated that it needs an AI program to navigate it. We've talked about how the Pentagon can't pass an audit. Right. Has never been fully audited before, can't produce financial statements, consolidated financial statements. The Intercept reported that the Pentagon created an AI system to navigate its own complex bureaucratic policies and budget rules. The program is called Game Changer, and they need it in order to understand the DOD's hundreds of revisions and limitations in the budget. Reading all of the policies would be like reading War and Peace over 100 times. The good news is that AI's like game changer have no problem reading War and Peace 100 times. It can make sense of over 15,000 Pentagon policy documents and helps officials understand budget rules and restrictions. Pretty neat. Actually. Use neat use case to overcome government bureaucracy and complexity. It has so far been used by over 6000 DOD users to answer over 100,000 policy queries. It is one of hundreds of projects funded by the Pentagon. So we don't know how exactly this works, but basically, I'm guessing they took all the DOD budget and all the all the laws that Congress has passed. Right. They stuck it into an LLM like and and made a customized chat bot for the DOD personnel so they can they can do what I'm doing where it's like I upload a single PDF and query that pdf. They've uploaded all the DOD documentation and now DOD personnel can query it and get answers in English.
David Leary: [00:57:06] So am I allowed to purchase a $600 toilet seat? They'll go check all the policies like, No, I'm not.
Speaker12: [00:57:13] Allowed to do that well.
David Leary: [00:57:14] And I bring this up because I think this is a real thing. I think the military like was buying $600 toilet seats somewhere. I think it's a real thing.
Blake Oliver: [00:57:22] That's just cost accounting. David. That's not real. Deloitte's CEO says he doesn't deserve his pay. Did you hear that one? This goes back-
David Leary: [00:57:32] Not at all. That seems like that would be a headline all over going concern. I'm surprised it was.
Blake Oliver: [00:57:38] It was this was from going concern.
David Leary: [00:57:40] Okay.
Blake Oliver: [00:57:41] So this is the CEO at PwC Australia. Australia is under fire, of course, for leaking government tax plans to their private company clients, basically. Cheating on the government with their other clients, which is totally unethical and illegal. And the CEO of PwC was hauled before The Australian. Do they have a Congress, something lawmakers and was questioned? Deloitte Australia CEO Adam Powick admitted that he's not worth his $3.5 million salary. He was questioned like, Do you deserve it? And he said he's not worth it. It's a Senate inquiry in Australia. Yeah. So here's the let's see. Are you really worth seven times the salary of the Australian Prime minister? She asked. No, he answered. I happen to deeply recognize that I'm incredibly privileged to earn what I do for what I do. He makes $3.5 million a year. The average partner comp is over. Well, it doesn't say that actually. It says that Australia has 304 partners making $1 million or more. The highest paid partner earns 4.45 million, 4.5 million. They make a lot of money there. But it's funny that he admitted he said he doesn't deserve it. I feel like that wouldn't happen in this country. You know, in the US, you you double down, you say, Of course I'm worth that. We protect the-
David Leary: [00:59:05] You know how hard I worked?
Blake Oliver: [00:59:06] Yeah.
David Leary: [00:59:07] I have these three letters. That's what he should have said. I have the letters. I did my 150 hours.
Blake Oliver: [00:59:12] Uh.
David Leary: [00:59:14] Do you want to like. I know we're kind of running over a couple minutes. I think I have to get on a meeting, but we have a couple of. Do you want to cover a couple of quick listener mails? Oh, you want to talk about some of the interviews we have coming up? I don't know. I'll let you own the last 3 or 4 minutes.
Blake Oliver: [00:59:26] Well, we did get a bunch of listener mail, and I really do want to get to that. Um, so this is a comment that we had on YouTube. So there's a, there's a short video that we put on YouTube called Why We Have a Shortage talking about like the low pay and the Long hours and all that stuff. And one commenter named LHS username said. This many undergrad accounting programs, I believe are so regimented in teaching this incomplete curriculum, they don't tie in their concepts to the broader business world, at least at the start. Then many students get blindsided when they get to intermediate accounting and are still unclear as to what the real expectations are when they get to the real world. Almost as if it's done by design to weed out otherwise smart and capable students. This kind of flawed setup would discourage would be accounting students from moving forward and entering the field itself. There goes another reason for the shortage. Want to solve this shortage and save the profession? Get students learning about general business management activities and decision making first, then learn the basic accounting with debits and credits, then get them doing a bookkeeping job. Establish mentorship programs if professors would be inclined to then move from there. And I completely agree. I was working as a bookkeeper while I was taking my accounting classes, and so I got to apply what I was learning in beginning and intermediate accounting in the real world. And I don't know how I would have learned that stuff in theory without doing it in the real world. It's a huge missing piece in our accounting education. So much of it is so theoretical. And, you know, y y I think that is because a lot of these professors have never worked in the real world. They've done like a year in public accounting, and then they go on and they become PhDs. They've done they have less experience than anyone else in the real world of accounting.
David Leary: [01:01:15] This is why I never finished school. I just could not it drove me crazy. I'd be working with people that I have not had a job and it would just make me crazy. Oh yeah. Like at the time I had two jobs when I was in school and it made me bonkers.
Blake Oliver: [01:01:24] It's nuts. And, you know, it was the same way when I was in music, when I studied music, the PhDs had the least practical experience working as musicians and were thus terrible at actually telling you how to perform in the real world. You know, how to how to do the job. And I just find academia to be disappointing in that way. Really like totally out of touch in Ivory Tower. And I feel like in accounting we've gotten that way. And that's why when kids come out of school, they don't know anything about how to do anything. They've just learned a bunch of theory. And it's, you know, I'm sorry, but if you're a professor and you disagree with me, put it in the comments. Send me an email. We are the accounting podcast at earmarked me. I know there are professors out there and teachers out there who are teaching their students about how to do stuff in the real world and have plenty of experience and think like the adjunct professors who have worked in accounting for years are the best teachers. Gary Krauss was my intermediate accounting professor at UCLA and he's a partner at Gersh Snyder and he was amazing at actually taking the theory and applying it to real life. And those are the people that I want to learn from. So, David, that's all the time we have for this week. We'll get to the rest of the listener mail another time again. You can email us the accounting podcast at earmarked me. Follow us on YouTube. Become help us get to 3000 subscribers and you can follow me. I'm @BlakeTOliver on all the social medias. David you are.
David Leary: [01:02:57] I'm just @DavidLeary easy to find.
Blake Oliver: [01:03:00] And we have any events coming up that we should talk about.
David Leary: [01:03:03] We're going to Sweet World in October.
Blake Oliver: [01:03:05] I think they're calling it Cloud World now.
David Leary: [01:03:07] -Or Cloud World. It's the NetSuite Oracle. Oracle NetSuite Conference to whatever the current name is at this moment. I'll have to double check on that. Quickbooks Connect in November and then Digital CPA in December. And I think you are sneaking to KubeCon, maybe.
Blake Oliver: [01:03:22] Yes. Our friends at Acuity have invited me to come speak there, so I'll be in Atlanta at Acuity Con. Shout out to all of our listeners from Acuity and a few other little things. We'll talk about it in the future. All right. With that, thanks, everyone, who joined us live. Great to see you all. Romeo, Adam, David, I hope to see you here next time.
David Leary: [01:03:44] Bye, everyone.