Don Jr. Explains GAAP & Why No One's Going Into Accounting

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] And that goes to what you were talking about earlier, David, with these robots. Okay. Yeah. A robot can deliver the food to the table, but it cannot support you the way that a human can. At least not now. And I think it's going to take a really, really long time before it can. And when it can, we'll be living in a robot utopia once I can do what humans do. It'll either be a robo utopia, robo socialism, you know, that's what we'll live in. A world where robots do all the work and people just get a paycheck from the government, or it will live in a dystopia in which the robots run the show. And we are just, you know, fodder.

David Leary: [00:00:39] Coming to you weekly from the OnPay Recording Studio.

Blake Oliver: [00:00:47] Hello and welcome to the show. I'm Blake Oliver.

David Leary: [00:00:50] I'm David Leary. It's Friday. How fast do Fridays come?

Blake Oliver: [00:00:54] Very quickly these days. You sent me an amazing video. I just want to kick off the show. With this video. It's from a deposition just a few days ago. David, why don't you set the.

David Leary: [00:01:10] Set the table. Isn't isn't coverage of of the Trump stuff that's like your ballpark. So I just throw those articles over the fence to you. But this is a video from the deposition of Donald Jr. Right. Donald Trump Jr. Don Yes, he just says he goes by don.

Blake Oliver: [00:01:25] Don jr.

David Leary: [00:01:26] And I don't know what the context of this is, but I'm assuming the maybe this is grand jury testimony. I have no idea. But there may be setting a table to establish his accounting knowledge before they ask him detailed questions about behaviors, possibly. So there's not a lot of context to this, but what is captured is gold. It's just gold. So I'll let you play it. Here we go.

The Donald Jr. Interview Clip: [00:01:49] Do you have any familiarity with an acronym? GAAP.

The Donald Jr. Interview Clip: [00:01:53] GAAP generally accepted accounting principles, yes. Okay.

The Donald Jr. Interview Clip: [00:01:58] How did you become familiar with that acronym?

The Donald Jr. Interview Clip: [00:02:01] Probably an accounting 101 at Wharton.

The Donald Jr. Interview Clip: [00:02:03] Okay.

The Donald Jr. Interview Clip: [00:02:04] What do they teach you about generally accepted accounting principles in Wharton?

The Donald Jr. Interview Clip: [00:02:10] Well, I'm not an accountant, but that they are generally accepted.

The Donald Jr. Interview Clip: [00:02:16] Anything else?

The Donald Jr. Interview Clip: [00:02:18] That's that's pretty much what I remember from Accounting 101.

The Donald Jr. Interview Clip: [00:02:20] So have you told me everything you know about Cap?

The Donald Jr. Interview Clip: [00:02:26] Basically, You know, I'm sure I could come up with some creative stuff to kill time, but I'd be doing neither of us a favor in terms of educating ourselves.

Blake Oliver: [00:02:36] So there you go. That's Don Jr's understanding of GAAP. He at least he knows what it stands for.

David Leary: [00:02:45] The crazy thing is, is to think about like Wharton Business School graduate. Right. This is. But it's also explains a lot of behaviors, right?

Blake Oliver: [00:02:56] It does. I like the I like the fact that he name dropped Wharton and then admitted that he didn't learn anything there. Well, David, we have a lot to talk about this week. We've got, of course, the ongoing Donald Trump senior saga in New York. His accountant, former accountant, was on the stand. Poor guy getting complained about by Trump in the courtroom. Trump apparently complained that he was mumbling he couldn't hear him. And so we'll dig into that a little bit. Us job growth has remained strong. Wall Street Journal did another piece on accounting. The headline is why no one's going into accounting. They're just giving us golden nuggets every single week here. They are obsessed with this more than we are.

David Leary: [00:03:46] They must get it must be getting lots of clicks because they're pumping out an article every week. It must be a ratings bonanza. The accounting crisis now. All right.

Blake Oliver: [00:03:54] I mean, guess I guess a lot of people are are reading these articles and we are helping to bring them to you. There is new research on the pipeline challenges underway. We'll have a link to a survey for you. Zoom has new features. How about you? What's top of mind for you?

David Leary: [00:04:11] I mean, I had a interesting learning from two restaurants and how they're rolling out robots and AI and how that, you know, applies. It actually goes to we've been doing a few webinars with ShareFile and it's about the customer experience. And so those articles kind of tie into that and some of the opinions we've had about the at the end of the day, it's the customer experience versus the technology. I got a little better understanding of. I think we talked about the whole Canadian CPA versus Quebec and the arguments. I think I have a slightly better understanding of what they're arguing about, what other good ones they they arrested the guy who leaked. Remember all the rich people's taxpayer data? Jeff Bezos. Donald Trump. Yeah. They arrested that guy. Saw that happen this week. Oh, fed. Now they announced some some upcoming changes to Fed now because that's the it's getting momentum and the new changes are going to probably really cause a lot of momentum. So.

Blake Oliver: [00:05:11] All right. So let's get right to it, shall we? We got a lot to plow through. Let me tackle this Wall Street Journal article first. Love this graphic here. It's an accountant with their head replaced by a calculator and a red line going downward. Why no one's going into accounting. Pay has stagnated in a profession once seen as a sure thing, while other fields are more lucrative. Pretty much a death sentence for my dreams. And. To summarize, it's really simple, right? Two things they mentioned that pay has stagnated for accountants. It has actually, adjusted for inflation, declined by 1%. It's confusing because they're averaging a bunch of years, but basically over the last decade or so, salaries have stagnated. The average accountant salary for 25 to 29 year olds there, the median is $56,000 a year. And that fits with what I heard on the AICPA town hall this week, where there is new data about accountant salaries and yeah, like 40 to $60,000 a year is still what entry level public accounting staff are earning. And it has not changed in many, many, many, many years. Not competitive, as Lisa Simpson said, and.

David Leary: [00:06:31] Robert half I think just released their his their salary guidelines for 2024 and going concern covered them pretty well. And I was looking at the the percentages and I was like isn't just 3.33.9, 5.29 even 6% just standard of living increases. These are not like real wage increases between 23 and 24.

Blake Oliver: [00:06:51] Now, The Wall Street Journal did their own analysis of federal earnings data, and they found that adjusted for inflation, 20 somethings accounting salaries stayed at about $56,000 since the 2008 financial crisis. There's some stories in here that I want to highlight. Britney Casey, 23, is the former president of the University of Houston Student Accounting Society, and even she is unsure if she'll pursue a CPA, though the credential is a gateway to higher paying jobs in accounting and finance, paying for the extra year of college credits to get a CPA is prohibitive, she said. For now, she plans to go straight to a job in the risk advisory division of Weaver, a Texas based accounting firm, once she graduates in December. So she's going to go work for a public accounting firm. She just has no plans to become a CPA.

David Leary: [00:07:36] Can you read the sentence? This this is a direct quote, right? Because the narrative we've always gotten from AICPA is like, no students ever talk about this or ever say these words. Can you read it again? What she said.

Blake Oliver: [00:07:47] Though the credential is a gateway to higher paying jobs in accounting and finance, Paying for the extra year of college credits to get a CPA is prohibitive. That's a direct quote from Britney Casey, 23, former president of the University of Houston's Student Accounting Society. There's another one here. A musician, a fellow musician who decided to change what he's doing. His name is Michael Bertold. He started in the tax division of a large firm after graduation in 2018, earning about $55,000. His work on corporate clients financial statements often entailed 13 hour days preparing tax documentation and converting data, leaving little time for the indie pop band he played with. Public accounting, quote, was pretty much a death sentence for my dreams, unquote. He eventually left to pursue music to earn money. He joined a company called Bean, which contracts out accounting services to companies that need more accounting staff. Bertold, who is 28 and lives in Los Angeles, now works flexible hours and estimates that on an hourly basis, his pay rate has doubled. I think that's that's about all I want to share from this story.

David Leary: [00:08:59] And there's that Wall Street Journal or was that Washington Post?

Blake Oliver: [00:09:02] That was Wall Street Journal.

David Leary: [00:09:03] Okay. So Wall Street Journal is going to they're going to get themselves to be enemy number one of some organizations out here.

Blake Oliver: [00:09:10] Well, you know, they're just pointing out the obvious truth and they're talking to people about it and they're surveying people. And that's what we should be doing. And luckily, we have seen some surveys come out. Arizona CPA Society is doing a survey. California society actually, the Board of Accountancy is doing a survey. I shared out the link on social media to that. And now we've got another one. Let me see if I can find that survey. Here it is. The Illinois CPA Society is doing some new research. I spotted this in practice advisor. It's in partnership with the Center for Accounting Transformation and a collection of other stakeholders. This survey expands on the one they did in 2020 that led to that report Decoding, Decoding the Decline, which we've talked about here on the show a lot. Yeah. Here's a link to the survey. It closes December 15th, 2023. And and they're.

David Leary: [00:10:10] Targeting accounting students, if I'm correct on that, if I read that correctly. Right.

Blake Oliver: [00:10:14] Well, so they got criticism in the past over that past survey because they didn't survey people who left the profession. They only surveyed current students and current accountants. They didn't go out and survey people who had left. And the goal of this survey is to get those people, too. So it says accounting and finance students and professionals under the age of 35, with and without a CPA credential are encouraged to complete the survey. The organizing partners are encouraging all accounting and finance professionals to share the survey link with those they know in the target audience. I do hope that they get this out to people who left because I think asking them why they left is really important.

David Leary: [00:10:54] Well, so we have people in our chat and we have listeners go to the show notes, click the link, fill out the survey survey. If you match this and if you've left the profession. The one thing I did click through to the survey book and started to take it a little bit and then I didn't finish it or submit the results, I'm a little worried. It's kind of long.

Blake Oliver: [00:11:12] Ten minute long.

David Leary: [00:11:13] If I'm thinking about I'm thinking about the the demographic. And I feel like we live in a 12 second world of TikTok videos and like to get somebody to spend ten minutes to do a survey and read all the fields and answer the questions thoughtfully, I just you're most self-selecting a certain type of person that will do a survey.

Blake Oliver: [00:11:31] They need a they need a prize. You know, I don't think.

David Leary: [00:11:35] There's a prize. Well, there should be. Taylor Swift. Taylor Swift. Taylor Swift.

Blake Oliver: [00:11:38] Tickets.

David Leary: [00:11:39] Tickets.

Blake Oliver: [00:11:40] Hey, Well, you said Taylor Swift. And I've got a story about Taylor Swift. We didn't even tease it in the beginning, but I got to talk about this.

David Leary: [00:11:47] This is more ratings. This is this is good. Yeah.

Blake Oliver: [00:11:50] Okay. So if you resold Taylor Swift tickets, the IRS is watching. I spotted this in Gizmodo. Apparently there's a new rule from the IRS where ticket sellers like Ticketmaster and StubHub are going to have to send a 1099. If you made more than $600 reselling tickets this year through those platforms, ticketing websites previously had to send 1099 forms to a user who made more than $20,000 through 200 or more transactions in a year. The updated law, which is part of the American Rescue Plan Act, lowers that amount to $600 regardless of the number of sales, and sellers will only need to pay taxes on the profit. So if you resold your Taylor Swift tickets. You might have to report that.

David Leary: [00:12:38] Back on the Venmo, PayPal $600 stuff. I thought they they they pulled back on I think I delayed payments. It got delayed. Delayed. But in the meantime, this now is popping up. It's just like I think this.

Blake Oliver: [00:12:50] Is the same thing.

David Leary: [00:12:51] Maybe it's related to that.

Blake Oliver: [00:12:52] Maybe like it's the same law. It just got postponed. I could be wrong on that.

David Leary: [00:12:57] But then now it's the next level of instead of just the payments companies, now they're.

Blake Oliver: [00:13:02] It's Well, those guys are paying.

David Leary: [00:13:03] Ticketmaster to enforce.

Blake Oliver: [00:13:05] Yeah that's true. If they're facilitating transactions they're involved in payment payments company.

David Leary: [00:13:08] Yeah.

Blake Oliver: [00:13:09] Yeah. David, do you want me to play your video of this robot? Yes. Okay.

David Leary: [00:13:16] And while you're queuing that up, so Chick fil A is testing robot servers. So not robot menus. Not robot. I was going to say burger flippers, but it's Chick fil A, like robot sandwich. Fryers. Pickle. Pickle. Appliers. Right. It's. It's So your food's done and it's going to bring it to you on a tray. And we have a little video of that happening.

Blake Oliver: [00:13:39] So we're watching a robot roll over with a tray. It's got that in.

David Leary: [00:13:43] A very empty restaurant, though.

Blake Oliver: [00:13:45] It's got that Chick fil A box and the robots walking away or rolling away. Okay. Hopefully that music in the background doesn't get us a strike on YouTube. Is the other video the same thing?

David Leary: [00:13:58] It's basically the same thing. I think it's harder to hear the robot, but it's very similar to the same.

Blake Oliver: [00:14:03] So what does this have to do with accounting? David It's a robot server.

David Leary: [00:14:07] So I've had this in my queue for a little while because it's, you know, it's everybody's trying to do things with tech and robots. Et cetera. But I didn't really bring it to the bring it up because it just didn't fit. But now I have a new story from this week that kind of starts to tie it together a little bit. So they're not the only ones trying. This last year, Chili's tried to do this and they halted it because people didn't feel like it was a it fits in the full service model. Right. And then there's another company. I don't know if you've heard of this place. Anthony's coal fired pizza and wings. I've heard of.

Blake Oliver: [00:14:41] It. I've never been there.

David Leary: [00:14:42] Okay, so they had an AI ordering platform. And so this article was from Pizza Marketplace, which is And this this company had a AI ordering platform called Becky. And Becky just had a lot of complaints for a year. People staff complained about Becky, the customers complained about Becky. And so they sat. And so the coal fired pizza, Anthony's coal fired pizza shut it down. They shut down. Becky, The AI ordering agent, from what I could tell, it feels like it was a telephone ordering agent. It wasn't a chat bot or a chat box type agent. But when they rolled it out, their goal was just like every accounting firm, right? They want to have improved efficiency, cost savings, order accuracy. And what happened? It turned out that people really want to talk to a person and what they were discovered thing like you might want cheddar jack cheese on your your pizza I don't know. And it just couldn't handle people's requests. So things that so what they discovered is there's higher customer satisfaction by ordering from a person and the order is faster and it's more correct was what they discovered. And this goes kind of I think when you think about firms, there's a place for AI and technology in your customer's journey and experience. You just have to figure out where that's at and what these restaurants are starting to discover. Maybe for a fast food or fast food place a robot delivering the foods. Okay, maybe ordering bot is okay, like McDonald's, you self-serve on that big touchscreen, maybe that's okay. But maybe if you're going to a maybe you're a little bit more of a full service restaurant or a full service firm, you might have to use just AI in the background. It might not be your front end. So you're going to have to it's you can't just roll it out because it's cost savings and efficiency. And I think we get trapped in our industry under that mantra. Yeah, right. Look at how efficient this will be, how without regards to the customer experience. Well, like.

Blake Oliver: [00:16:38] In this restaurant example, they're using robots. Chick fil A is using robots to deliver the food. There's not much of an interaction that happens there. It's okay to automate that because nobody really cares if a human delivers the food or a robot delivers the food. The point is that the food got to your table and it's a big difference from using the AI to do that initial customer interaction where they're ordering, which is much better done by a human currently anyway.

David Leary: [00:17:05] So but even the delivery of the food, even Chili's discovered that more of a sit down dining experience. People didn't like the food being delivered by a robot there because they.

Blake Oliver: [00:17:15] Had different expectations.

David Leary: [00:17:17] At different restaurants. Basically, the it's the environment. You have to understand your clients right, in Chili's. And then guess what's good is like they're all testing this. Like if Chili's rolled out to every single restaurant, it would be it would be a big failure, but it probably did 1 or 2. And then they learned. And so as your firm test things with 1 or 2 clients before you roll stuff out to your firms as well.

Blake Oliver: [00:17:39] Well, since you got us on the topic of automation, let's talk about one of the big AI announcements this week. Of course, we had plenty from OpenAI and Microsoft, but this one I hadn't heard a lot about. It's Zoom. A lot of us are using Zoom in our meetings and Zoom has added AI companion features. So let's take a look at this video from Zoom and see what's what's new. Say hi to Zoom AI companion integrated throughout the Zoom platform team chat. What are we doing here? We're clicking and we are summarizing. Summarizing. Automatically missed chats. A lot of people don't know that Zoom has chat composing Slack type product. Yeah, they've I can't believe they didn't do it sooner. I mean, it makes so much sense. They could have actually beaten Slack. Now. Oh, this is great. So now it's summarizing a meeting when somebody jumped into it late. Real time transcriptions are happening here. There are whiteboards. We're generating a list of ideas from the meeting. That's pretty cool. So it's creating a whiteboard from the conversation automatically. That's one of those things that you miss from an in-person meeting is just being able to get up and put ideas on a whiteboard. Yeah. Summarizing a meeting. Tasks Action items. This reminds me a lot of what you get in fireflies. I Smartsheet recordings for meetings, so it's creating chapters automatically. Chapters of meetings.

David Leary: [00:19:18] A lot of this stuff we're plug ins. You could get 5 or 6 apps to do all this and Zoom and now there's going to roll it out in your subscription. Well, you're going to pay extra for it, I'm sure. No, it's.

Blake Oliver: [00:19:26] Included. So that's what really I liked about this is I got an email because I have a Zoom account, just one, right? And it said, you can enable all these features for free. It's included in your subscription, so you just got to go.

David Leary: [00:19:38] So I'm in the $15 a month plan of Zoom. I don't have to upgrade to get stuff. No.

Blake Oliver: [00:19:43] Wow. See, that to me makes sense because the whole point of the AI stuff is to increase adoption. And so if you charge extra for it, you're not going to get the adoption if you charge a lot of money for it. And then, you know, like I think the winning companies are just going to roll it into the main product and not charge extra.

David Leary: [00:19:59] Now, did they do any AI to like tell you like, oh, you left Google Hangouts open in a different browser tab and you can't get your camera to work and zoom until you close the other browser tab with Google? Do they have to detect that? Because that is my day every day?

Blake Oliver: [00:20:12] No. Well, maybe Windows Copilot will figure out how to do that soon. Hey, we had a comment come in from Heather in the live stream. Thanks, everyone, for joining us. As a reminder, you can join us live on YouTube, subscribe to our YouTube channel, the accounting podcast, Get notified when we go live and you can chat with us. Heather is actually coming in from LinkedIn. We are streaming to LinkedIn as well. Heather says. So So since I finally started using Fathom to do these things in my Zoom meetings, Zoom finally has the tool itself. Yep, that's just right. And I've been using fireflies now for about a month and it's a similar tool where it joins all my Zoom meetings and it records them and it transcribes them and it creates a list of action items and it creates a summary. But hey, if I can just get that directly from Zoom at no additional cost. Win win. Of course, the problem is I do Google meets and I do zooms and I do teams meetings and I do all these other things. So if you're all in on Zoom, I think it makes a lot of sense. And one of our listeners on LinkedIn also says, I love fireflies. I yeah, I'm a I'm a big fan of it now and I've integrated it with notion so that all of my meeting notes go into notion where they are searchable. So if I ever need to go find something, I can find them again. I haven't actually used it to do that yet, but theoretically it's all there. Maybe in the future when AI is even smarter, it'll go through and organize all that stuff for me. So I guess capturing the information is just valuable right now because who knows what we'll be able to do with it in the future. You got any tech stories, David, or should I just keep plowing through.

David Leary: [00:21:42] Tech store a little bit? This is kind of a tech story slash update. So we've talked about Fed Now and the release of Fed. Now they've hit a new milestone. They've announced the Federal Reserve has announced they now have over 100. So 108 institutions are using Fed now and they've hit about 20 service providers are supporting payment processing and instant payments infrastructure. But what they're planning to do is what was more interesting to me is they plan on introducing a tech centric developer resource in the coming months. So basically it's going to let lack of better words apps, right? Access documentation with updated operating procedures, technical specs, sample code, sample messages to assist in the rollout and coding this up. So when all zero has an API with all these types of resources for somebody to build an app on zero or build an app on QuickBooks, these are developer resources and they speed development up for third party developers. So in summary, this is going to be big for our ecosystem, the ecosystems, right? Because apps that are in the payment space can now roll out fed, Fed now much faster, which will help because we all use apps and we get paid from clients and it takes six days, ten days to get an ACH transfer. Who knows? But if you can get them in 30s a payment from a customer, that's huge. Yeah, that's great news to Ripple.

Blake Oliver: [00:22:59] Shelley had a question about the Zoom I, Shelley asked, is the AI searchable to others? And the answer is yes. You can share the meeting summary and next steps through email and Zoom's team chat. Uh, Erica, welcome to the live stream. Erica says. Hi, everyone. I'm going into accounting with a minor in forensic fraud. I'm 47 years old and won't graduate for another two years. Erica, one career changer to another. Welcome. Forensics is a fantastic field, and I hope you have a great second or third. I don't know, whatever new career level this is for you. We need more accountants. We need to make it easier for people to become accountants without lowering the standards. That's very important. We always have to say that. Hey, do you want to get into some listener mail? Yeah. So I got an email from Jerilyn and Jerilyn said, Hey guys, on your episode last week, you touched on the issue of accounting professors lacking real world experience. I'd love to see you dig into this more because I think it's a big issue. Accounting professors have outsized influence on the career paths of their students, and many of them either lack the real world experience altogether or have been out of practice for so long that they aren't very well versed in the various types of career paths that are out there. I have now been to a few conferences where it was very evident by watching the way that professors interacted with partners from the Big four firms that they are still enamored with this being the best path, but we know very well that it is not the best path for everyone. I have to imagine that there are schools out there where their accounting department values the real world experience just as much as a PhD. Can you find them? I'd be curious to see if the students that graduate from these programs continue on to careers in accounting and what paths they take. I also think that exposing students to professors that have lived the experience of a working accountant or CPA is a very viable strategy to save our profession and replenish the pipeline. Thank you, Jerilyn.

David Leary: [00:25:04] It's a big sneaky about this because you have a theory. It's a theory. Maybe it's even proven. But one of the reasons that people aren't going to accounting is because you have read it in these bulletin boards, and students talk to each other and they hear about how bad it is to work for big accounting. Right. Do you think the same thing is going to happen to professors like Word'll? Get out and schools will get out? Like, Oh yeah, don't go to that program or this. This professor knows more. Like just that social interaction will naturally vet people out, I think. Is it Sharon Lasser or Sarah Lasser?

Blake Oliver: [00:25:37] I'm going to Sharon Lazard. Sharon.

David Leary: [00:25:39] Dr. Sharon Lasser Yeah. We interviewed her last week and she kind of talked about how, like some grad programs are just going to die because people are going to figure out they're not good.

Blake Oliver: [00:25:48] Yeah, Well, and that is a great bonus episode. If you haven't heard it yet, go back and listen to the recent interview with Dr. Sharon Lasser from the University of Denver. She runs the accounting program at the University of Denver and joined us for a 45 minute interview to talk about the 150 hour rule and how we should change licensing requirements. And even though she runs an accounting program which includes a mac, she says we should get rid of the 150 hour requirement immediately in every state. And she's not afraid of it hurting her Mac enrollments because she believes that the University of Denver has a Great Mac program that creates value and students will continue to go to it even without being forced to get an extra 30 semester hours. But she also said there are some Mac programs out there that were just designed to take advantage of this requirement and aren't very good, and those will suffer and maybe go away. But hey, that's a good thing, right? We don't want these programs out there if they're not creating value for accountants. So if you are creating value as an educator, you will still have students even without the requirement and you'll make it easier for career changers like Erica, who's in the stream today, who is 47 and says it's her third career change to become a CPA, to get into the profession, you know, like otherwise these people aren't going to do it. They're not going to go back and get another fifth year of education. And we cannot solve this problem alone with just people coming through the traditional education pipeline. We got to get people who want to join accounting, whatever their age. Okay. Getting off my high horse there.

Blake Oliver: [00:27:26] Let's get to another listener mail. This is from George. George said, Love your podcast. Thought I would just pass on my personal complaints back in the 80s when I was an accounting major at the University of Northern Iowa. You and I had a rule that you could not take any accounting courses your freshman year. What a wonderful way to start an accounting career after taking high school accounting classes and having to take completely ridiculous general education credits for the first year of a four year bachelor's of accounting. And yes, as you can imagine, the accounting degree is now a five year program. Sheesh. Number two, I wonder about the CPA exam. In other words, I'll bet if a CPA took that exam today without any study materials or college refresher classes, they would not pass. It seems to me the exam is and always has been, an exercise in memorizing material and regurgitating it on a test. Could an auditor in a Big Four with their CPA credential pass the income tax questions today? Could a seasoned CPA tax professional pass the audit questions with this same professional be able to calculate retail dollar value LIFO with no reference material? I know there are specializations, but to memorize take a test and never use 50% of the test material seems to be a barrier to sit for the CPA exam. I realize the same would apply to the bar exam and medical boards. It just seems to me there must be a better way for accounting, education and certification. Sorry for the rant Smiley face. Don't apologize for the rant. You listen to me rant every single week. So if you want a rant, I'm all ears.

David Leary: [00:28:56] We're a forum for you. If yes, feel free to send us emails with your rants or record a voice mail. We'll play them for sure.

Blake Oliver: [00:29:01] The accounting podcast at earmarked me. Send us your emails. Or even better yet, send us your voicemails. The accounting podcast at earmarked me. Okay. Getting through this. We're getting through the backlog. Here's one. This is a nice short and sweet one. This is from Taylor. Taylor said, Hey, Blake, I always thought negative confirmations were a worthless check. The box procedure. If auditors were doing a proper risk assessment, they should have already opted for positive confirmations when cash, accuracy or existence were more than low or remote risk. Thanks, Taylor. And that is in response to the story about the PCAOB changing audit confirmation requirements for audit firms. Now, you are no longer going to be able to rely exclusively on negative confirmations, meaning you send the confirmation letter and the bank never responds and you go, Oh, I guess that means this amount must be correct. I can't believe that was allowed. It's kind of crazy. And that's just been a rule that the PCAOB adopted from the AICPA back in 2003 and they never actually made their own rule. So now under Erika Williams, the PCAOB is actually creating some rules. It's going to create a lot of work, though, for accounting firms. So the question is, well, with the shortage that we have now, how are they going to do these positive confirmations? I think this is actually a huge ticking time bomb, this change, this rule change.

Blake Oliver: [00:30:25] All right. Moving all along. Live assisted bookkeeping for $50 per month. So, David, we got this tweet from Catherine, the CPA. Username is at love to travel on Twitter saying um Blake and David did you see this seems to have gone live recently and this is. A QuickBooks Live Assisted Bookkeeping Service. Now, this is not the full service assisted bookkeeping that we talked about last year for, what was it, $200 a month? This is different. Here's what Intuit says it is. This is the screenshot we got. This is a monthly subscription service offering ongoing guidance on how to manage your books that you maintain full ownership and control When you request a session with a live bookkeeper. They can provide guidance on topics including bookkeeping, automation, categorization, financial reports and dashboards, reconciliation and. I can't see that word. Something creation and management. They can also answer specific questions related to your books and your business. Some basic bookkeeping services may not be included and will be determined by your live bookkeeper. The live bookkeeper will provide help based on the information you provide. So basically on the pricing page now you can pay an extra $50 per month and get access on demand to QuickBooks Live bookkeepers who will help you whenever you want.

David Leary: [00:31:44] And it feels like it's a little bit more open ended coaching ish. Like, Hey, I need to think about getting a I have a timesheet tracking problem, my employees, and then they're going to come in and recommend some solutions possibly for me and then I'm in and out. So it's not I'm not hiring a bookkeeper. I'm just getting some expert advice temporarily. Yeah, I'm on a month to month basis. If I use it. Yeah.

Blake Oliver: [00:32:06] Assisted bookkeeping. It's available for $50 per month on every single tier of QuickBooks. All the way from simple start up to advanced on the QuickBooks pricing page.

David Leary: [00:32:16] How much is it? A month?

Blake Oliver: [00:32:18] $50.

David Leary: [00:32:19] Okay. I'm going to put some perspective on things. I'm going to go back on my time machine here to 1997.

Blake Oliver: [00:32:27] Take us back, Grandpa.

David Leary: [00:32:27] David, back in the olden days, you know, this is the olden days of tech support, an in-person tech support, huge call centers, and you're selling desktop software. So somebody would buy QuickBooks for 99 bucks. Then they need tech support. And we used to charge if it wasn't actually a bug in the product, it was more because you get lots of how do I's right? This is the 1997. We would charge people $35 for one call. I think.

Blake Oliver: [00:32:58] That went on for a while.

David Leary: [00:32:59] And then I think they bundled into like you could get five questions for 100 bucks or something like that. But you think about that like you're getting this is 20, 30 years later and you can get a similar type service for your QuickBooks for 50 bucks. Right. And is it unlimited? Is it once a week? Does it say it's unlimited?

Blake Oliver: [00:33:20] It doesn't say there's a limit. I mean, but here's the thing about these kind of unlimited things. You can always put some provision in there that says we can. If this ends up not working out, we can always cancel this. Right? So if somebody really abuses it into it could say, you know what, you're not really a good fit for this. We think you need to be on the full service plan. I think this is brilliant. I think every single accounting firm with a bookkeeping or a client accounting services practice should be looking at doing something like this for their clients. You've got tons of clients that are doing their own bookkeeping. They are calling you for help and you are not getting paid for it, or they are reluctant to call you for help because they're afraid they're going to get billed $200 an hour or something for their questions. And you could offer a monthly subscription. Forget the dollar amount. It can be whatever you want. But Intuit has said this is worth $50 a month. You could charge $50 per month. And guess what the benefit is to you, even if you're just covering your cost or even if you're losing your money, you are reducing the amount of crappy books that you get at the end of the year for taxes. And that increases the realization on your tax work. And this is why every single tax practice should be growing their accounting and bookkeeping practice, because it makes your tax work so much more lucrative. I experienced this myself in my own firm. Everyone I talk to has done this, has had the same experience. Your firm will be better. You just have to stop looking at bookkeeping and tax as separate. They are the same thing. If you're doing both for your client, they should be looked at holistically. If you look at.

David Leary: [00:34:58] And think go for it, it's mindset, right? The other mindset of this is I think accounting firms, somebody sees this and they're like, Oh my God, every client is going to call me. And the reality is people are going to pay for that month after month after month and not even utilize it exactly like a gym membership. Right. And so so you just need to sell it to all your clients and just it'll be spotty who uses it when. And yes, you're going to have one client that excessively uses it and that's but you're going to have lots that don't use it at all and you're just making money. Imagine you had this mindset.

Blake Oliver: [00:35:27] Imagine, imagine you had 100 clients paying you $50 per month for unlimited bookkeeping assistance. Now, this doesn't mean that they get to email you and you have to fix it and email them back. No, this means they have to actually schedule time with you. And the way you deal with capacity is you limit the hours per day that can be scheduled and we are only going to allow them to get booked for this many hours per day for service requests. And you could say it's only 15 minutes, 30 minutes, you could use a Calendly link, you could use whatever these calendar booking things are and that's how people get support and just have them bookmark it and book time. The other way you could do it is you could just have people call in and it's only available during certain hours. That's another option. I mean, there's lots of ways to manage the capacity on.

David Leary: [00:36:12] You could do it as a round table where you do multiple clients at once. Yep. Right.

Blake Oliver: [00:36:16] Yeah. Yeah. Have office hours. I actually did that in my firm where I had office hours, and if you were a client, you could just drop in on Tuesdays and Thursdays for these two hour slots, and I would help you out. And sometimes I would have two clients jump in together at the same time, and I'd put one in the waiting room and I'd say, Hey, can you hold on for 15 minutes while I resolve this? And they were like, Yeah, sure, I'll be on hold. So lots of ways to do it. Here's another email. This is from Spencer or no Sager, Sager said. Hello. I hope you're doing well. This email is coming from an accounting student who is in panic mode right now. I watched your podcast with the role of AI in accounting and it totally freaked me out. Now I am really considering changing my major as I don't know if I will find a job two and a half years down the line. Would you honestly recommend students to major in accounting or not? Thank you. Uh oh. I'm not helping.

David Leary: [00:37:16] But I just talked about like, yes, there's going to be doing stuff. I can't do everything. People want Customer experiences. Yeah, right. Well.

Blake Oliver: [00:37:25] And you know, in our last episode, we talked about cities with 20 to 30% growth rates in accounting, and we are not producing more accountants every year. We are losing accountants. So what do you think's going to happen to the people who stick around? They are going to be in high demand. We're only going to automate like best case scenario in a couple of decades. We've automated half the work. That's the best case scenario, if you ask me. So we're still going to need like a million accountants in a decade or two. Like, and there definitely not enough. Yeah.

David Leary: [00:38:01] Yeah. Even automating half of the work does not solve the problem. Yeah.

Blake Oliver: [00:38:05] Yeah. And Christopher says AI is not support and that goes to what you were talking about earlier, David, with these robots. Okay. Yeah. A robot can deliver the food to the table, but it cannot support you the way that a human can. At least not now. And I think it's going to take a really, really long time before it can. And when it can, we'll be living in a robot utopia once I can do what humans do.

David Leary: [00:38:26] Episode name.

Blake Oliver: [00:38:28] It'll either be a robo utopia, Robo socialism. That's what we'll live in. A world where robots do all the work and people just get a paycheck from the government. Or we'll live in a dystopia in which the robots run the show and we are just, you know, fodder for some people say.

David Leary: [00:38:44] We already live in an accounting dystopian. All righty.

Blake Oliver: [00:38:47] So good. So here's my response to Sage. I said there's a huge shortage of accountants, but it's only going to get worse. So please don't worry. As long as you are willing to learn to use AI, you will always have a job in accounting. The problem is going to be happening for those who refuse to learn how to use it. It also depends what you want to do in the accounting profession. If you're willing to do something where you interact with people, that is not going to get automated anytime soon. So help people plan, Right. Tax planning versus tax compliance. Financial forecasting versus just reconciling the books. There's so much incredible opportunity if you get into either of those fields right now. Here's one regarding education opportunities, ways to get your 150 beyond a mac. Caden said, Have you ever heard of CPAs doing FEMA credits? Fema? I studied 15 credits of earthquakes, tornadoes and disposing of dead cows. Thanks for your article. I guess that was in response to my article about the wild ways accountants earn their 150 hours with the scuba diving and the pickleball and the rock and roll history courses and all that. So didn't know that FEMA offered credits. We're going to have to look into this. And that actually fits with another story I had in my queue, and I can't find it right now, but it was somebody who posted on Twitter and then one of our listeners sent it to me about how there's this online school called Western Governors University. Wgu Have you heard of this, David?

David Leary: [00:40:23] I feel like we've mentioned those letters on the show before. Yeah, I feel like it.

Blake Oliver: [00:40:29] So WGU was created by like a partnership of different states, different Western states to provide affordable online education, to help people get college degrees. And one thing that's really unique about it is that it's an all you can eat pay by the semester program. So theoretically, you could take every single class you need to get a mac or a masters. I don't know if they offer a mac, but you could take in one semester all 30 semester hour credits if you wanted to. And there's a guy who posted on Twitter about how he did it for like an IT master's in a single semester. So if you're really willing to grind, you could do it all in one semester and it would only cost you. Let's see what the tuition is here. Yeah. So it's $3,575 for a six month term. It's slightly different depending on what you're doing. Basically, somewhere between 3000 and $5000 like you can get.

David Leary: [00:41:34] And it's all self-paced.

Blake Oliver: [00:41:36] Or is it? It's all self-paced.

David Leary: [00:41:39] Oh, I should go get my degree. Finally. Yeah. I'm much better at those, like, sit down in the weekend and knock out three classes. Yeah. Boom, boom. I'm much better at those types of things, Ryan says.

Blake Oliver: [00:41:49] Yay! Wgu. That's where I got my degree. Oh, that's awesome. And he says if you pass your pre test for your class, you can go straight to taking the final. Oh, so you can test out of courses. So that's how you could do it all in one semester.

David Leary: [00:42:02] David But when you test out a courses though, do you does that count for your 30 hours?

Blake Oliver: [00:42:07] If it's if it's if it's credit on a transcript, if that's how the school does it, then I think it would qualify. Okay. I mean, unless there's some specific provision in your state licensure requirements that say you can't do it that way. But I've heard about plenty of people testing out of their requirements. Using College Board has a way to test for college credit. You can just take a test and you can get college credit at certain schools, Ryan says. Yes. So. David Yeah, just test out of that stuff. So there's some creative ways, you know, to earn your one, your 150. So I've got a video that I want to play. This was actually via Ashley Francis and. She got something. Something pretty cool here. Just bear with me. It's called Autogen. So this is one of those things that kind of went under the radar. I'm going to fast forward to the seven minute mark. It's got a funny comment about Excel.

AutoGen Clip: [00:43:06] Microsoft just dropped something huge and no one is covering it.

Blake Oliver: [00:43:10] Great hook there, right? Let's see this.

AutoGen Clip: [00:43:15] Typically it checks to see if this code is able to run and it tells them, wait, we have to install this thing before we run the code. And then guys like, Oh, okay, here I'll write the code, including the instruction to install that code. Then boom, it works. So if you're having a one on one conversation with ChatGPT, this would be an erroneous answer. But because you have multiple agents, he catches the error. Tell him to correct it and boom. Now you can install the software, create the output that was asked for, which is whatever the two meta in Tesla stock prices. And then this is where the human comes in. So he looks at this. No, no, no. I want the percent change. And ChatGPT goes, Got it. Here's the revised code and then the python agent plots it. What this means is that whatever time you've ever spent in your life practicing how to use Excel or Tableau, what this means is that time is gone and it's wasted and it's never coming back because I can take care of that in seconds data.

Blake Oliver: [00:44:05] So what this video shows is this way that Microsoft has demonstrated of using multiple AI agents to solve problems is much better than a single AI. And so the idea is that much like people in a company, you give AIS jobs and you say you're the project manager, you say you're the coder, you say that you're the quality control and then you have them interact with each other until they get to a result they're happy with. And then it goes to the human. So you're creating a team of agents so they can fix a lot of the issues before it ever gets to you, increasing the quality of the output. So imagine in accounting, if you had a bookkeeping team of AI agents where you had one AI agent that was responsible for coding transactions into the general ledger, and then you had another AI agent that was responsible for reviewing the coding of the transactions and the reconciliations and then sending them back to the original AI.

David Leary: [00:45:09] Yeah, because this concept of like, you're gonna have this one super powerful AI that's just going to do everything perfectly. It maybe isn't very realistic, but you could definitely have This one's good at this and this one's good at double checking this and this one's good at Sandy checking this. But yeah, I think that could make a lot of sense to stack these up in a way. Like, isn't that kind of what Intuit's kind of trying to do there? They set themselves with a platform, not so much the checking, but different types of AI tools will be, and you'll be getting the proper one at the proper time. It's not just one tool, right?

Blake Oliver: [00:45:45] Yeah. All right. That's all of our listener mail. We did get a comment. Cameron said, Glad I found this podcast. Let's keep the conversation going. You guys remind me of the all in podcast. I can see this growing. Thank you. That's quite a compliment.

David Leary: [00:46:00] I have two small IRS things if you want to touch on. Yeah. So the first one is so we talked about this. I must feel maybe two years ago. Remember all the tax returns? Jeff Bezos, Donald Trump's all the rich people's tax returns got leaked. Well, they made they made an arrest and they filed charges now against Charles Littlejohn, age 38, from Washington, DC. He worked at the IRS as a government contractor. And he's basically he's been now charged with one count of unauthorized disclosure of tax returns and return information. If convicted, he'll face up to five years in prison. I went and found him on LinkedIn. Oh, really? There's not much on his page. His job was data process management at the IRS and he was there for years. It wasn't like he was just like some newly hired person. So he was there for a very long time. Um, obviously, you know, the Republican side of the aisle, like they want to behead people and hammer for investigations and all of that, but I couldn't find even reading in the, the actual legal court documents really what he did. Right. I was wondering, how did we how did he have access to going like this? Just like go and search, like, let's see Jeff Bezos and you type it up in some computer and you download the forms like, how did he do? This is the questions I have. But I couldn't really find anything on that.

Blake Oliver: [00:47:21] You said you found his LinkedIn profile. Yeah. So like, does it say what his, you know, work history was? Because I had the same question he worked.

David Leary: [00:47:30] Just at this other this other data company. Okay.

Blake Oliver: [00:47:33] So he's an IT contractor. That's our guess, right? And think about it. Irs contracts with it. People it people need to have access into systems in order to do their work and. They probably had zero internal controls about what sort of data these contractors were able to export. And that's what they should have in place, is if somebody starts downloading, CPAs.

David Leary: [00:47:58] Have to do it, CPAs have to have compliance.

Blake Oliver: [00:48:01] I know, right? Oh, yeah. So I really want to know, like what was the what were the what was the lack of controls that allowed this to happen? Right. It's probably just like, Oh, you're going to go work on this system. Here's the admin login. You know, I'm going to guess it was that bad.

David Leary: [00:48:16] Yeah. And I mean, like how many people the IRS can just pull up people's returns and peek at them? Makes you wonder like, what's happening back there. So speaking of contractors, though, I think getting an IRS, a contract job with the IRS could be a good idea. So.

Blake Oliver: [00:48:30] Well, but yeah, except you're going to be the ones that get you're going to be one of the people that gets furloughed or fired when the government shuts down. So the contract roles.

David Leary: [00:48:39] If you saw the headline, the IRS is slashing the fees.

Blake Oliver: [00:48:43] Yes. Apparently a judge determined that the PTEN fee was burdensome and it was like it wasn't that high, though.

David Leary: [00:48:51] $35. It was like $35. And but this fight started in 2012, apparently, and then in 2016 became a class action suit. So this has been going on for a very, very long time. And so basically the way they did it, they figured out between 2024 and 2026, they have an exact number here. The cost to the IRS for the PTEN program is going to be $27,432,969. And if you take that divided by the approximate 8000 830,000 participants in the program, it comes out to about 11 bucks a head. And that's how they determine the pricing. But here's the sweet spot. So you take so you got those 830, 831,000 that are in the program, but the fee is 11 plus an extra $8.75. It goes to a contractor. And so some contractor per year is getting a nice $7.2 million revenue business. I don't even know what they do for the pizza in program, but we're in the.

Blake Oliver: [00:49:51] Wrong line of work, David. I mean, I like podcasting, don't get me wrong. It's got good work life balance.

David Leary: [00:49:56] But if the IRS would like to create a podcast, they could reach out to us.

Blake Oliver: [00:50:01] Happy to help. So I teased that we'd be talking about Donald Trump again and his accountant, Donald Bender, former accountant at Mazars.

David Leary: [00:50:14] And so he's not the one who was doing like the personal type stuff and keeping a log of it in Excel spreadsheet. So he was with Mazars and.

Blake Oliver: [00:50:22] Now he's not the CFO.

David Leary: [00:50:23] Weisselberg That was the CFO.

Blake Oliver: [00:50:25] That Weisselberg was the CFO. He pled guilty to a bunch of stuff and he was the one who was getting a bunch of like fringe benefits and not reporting that as income and like significant fringe benefits, like an apartment and his kids tuition.

David Leary: [00:50:38] But he tracked it all in this spreadsheet was beautiful, right?

Blake Oliver: [00:50:40] He made it real easy for the prosecutors. So on the fourth day of the Trump trial going on in New York right now, Donald Bender, former accountant for the Trump Organization at Mazars, the external accountant, made an appearance and apparently the defense well, so the prosecution's argument is that Trump and his company had complete control over the preparation of financial statements with the accountants relying on information the Trump Organization provided. And then those statements had Mazars logo on them and were sent out to banks and insurance companies and were fraudulent and had overstated the value of all these assets, allowing Trump to get all these loans and insurance policies that he shouldn't have qualified for. Right. Financial statement fraud there. The defense is trying to show that if there were problems with the financial statements, the flubs were accountant Donald Bender's fault. They're blaming the accountant. Yes. Trump lawyer. Jesus Suarez on Thursday continued an exacting cross-examination of Bender, who worked on the statements for years. And yeah, that's basically it. Oh, and Trump was complaining, apparently during the hearing that he couldn't hear Doug Bender, who was supposedly mumbling. But we can see here in the picture that Bender is wearing a mask. And so I guess if you wore that in the trial, then it would be a little maybe a little hard to hear him. But yeah, so and this is something we should clarify for our listeners who haven't followed our extensive coverage of of the financial frauds at the Trump Organization, Mazars was engaged to prepare a compiled. They were engaged to do a compilation. That was what they did for the Trump Organization. And the accountants may know what a compilation is. David You had a really great way of describing a compilation in plain English.

David Leary: [00:52:43] How long ago?

Blake Oliver: [00:52:44] So basically, under a compilation, you don't do any audit. Of the information. You just take the information that's provided by your client and you assemble it into a set of financial statements.

David Leary: [00:52:57] And it's like building a PowerPoint deck with all the other financial statements.

Blake Oliver: [00:53:00] Well, and so it's a really old fashioned kind of thing, if you think about it, because these days, anyone can buy accounting software that allows you to make financial statements. And so these days, essentially all a compilation is is you send over your, you know, financials out of your accounting software to the accounting firm. The accounting firm looks at it and makes sure everything is categorized properly. They don't actually dig into any of the numbers and then they slap their logo on it. And a big disclaimer that says these are, you know, this was not audited. And so nobody.

David Leary: [00:53:30] Nobody ever reads the disclaimers. They just see the logo and move on.

Blake Oliver: [00:53:34] Well, apparently if you're a banker, that doesn't do due diligence. Yeah, you don't. You don't look at which we've learned. Which we've learned. Yeah. Bankers to celebrities are, you know, not doing their due diligence. So yeah that's that's where they're at. I don't I don't think that like just based if this is the defense's argument that the accountant should have done that they're blaming the accountant. I think they are not going to succeed because it's very clear in a compilation engagement what exactly is done. And this is not a jury trial. So it's not like there's a jury that you could convince the you know, like the accountant should have done something. This is a judge who understands how these engagements work and can clearly read what it says in the engagement letter. So I don't know what they're doing. It makes no sense to me.

David Leary: [00:54:24] Oh, we can go back to you know, we can Don Jr should be the expert. You know, he went to Wharton. He's the an expert on golf. He could speak to this stuff.

Blake Oliver: [00:54:32] Yeah. Maybe we should ask Don jr what a compilation is.

David Leary: [00:54:36] We should touch base on what I mentioned about Canada and Canada. Oh, yeah.

Blake Oliver: [00:54:42] Yeah, you got it. Let's. Let's finish up with that since that's in our headline here.

David Leary: [00:54:45] Yeah. So if we rewind, we talked about this a little bit before Ontario, Quebec, they've given notice to Canada that, yeah, they want to terminate their agreement in December of 2024.

Blake Oliver: [00:54:59] So CPR Canada is the national organization. Correct. And then these are Ontario and Quebec. Are the provincial groups sort of like our state societies?

David Leary: [00:55:09] Exactly. And just, you know, like a lot of the societies here in some parts and some of the provinces are self governed. But Quebec is not self-governance. So they have laws and the way they run their CPR, Quebec. So there's laws telling them how to do things. And so one of the major arguments they're all having is about poor transparency of the financial records of CPR Canada. So CPR Canada saying we gave you all the transparency you need and CPR, Quebec's like noted in it and we have to have this. And so but so now I have an understanding why they're arguing. But the more I not understand it, I question it more like what's the real reason you're arguing? Like, is it just because like, they won't give you some financial reports that you want to see? Like what's being hidden, like what's really happening?

Blake Oliver: [00:56:06] So what happens if CPR Quebec breaks up with CPR Canada? Like, what Does any of this actually mean for anyone?

David Leary: [00:56:14] I think they kind of have a collaboration accord. It probably goes back to like here with 150 rule, like the response, Oh my gosh, I might be able to say it. Reciprocity, reciprocity across the states, you know, like, oh, that's going to all fall apart and you won't be able to have mobility. I wonder if it's like this, like it's a control at the top thing. But it just makes me wonder, like, what's the real beef that's happening? Like, I would love our Canadian listeners to send us emails or give us some calls because it seems silly that they're just arguing over They won't disclose financial statements enough unless there's something in the financials that maybe there's people know about and this is trying to get it exposed. I don't know.

Blake Oliver: [00:56:54] Quick follow up. I lied. I'm going to I'm going to finish with something else. That's all right. Mgm Resorts refused to pay the ransom in the cyberattack on their casinos. So we have confirmation now from The Wall Street Journal that MGM Resorts had a cyber attack. They were hit with a ransom. They chose not to pay it, which aligns with the FBI's advice that paying does not guarantee data recovery and could incentivize further attacks. And here's what happened. This this is a financial disclosure. The cyber attack resulted in a decrease in resort occupancy, dropping to 88% in September from 93% a year earlier. So guess they lost 5% occupancy, which actually doesn't sound too bad. I guess people already had trips booked, right? So it was just inconvenient. The company expects bookings to return to normal in November and they have insurance to cover their financial losses. The hackers managed to steal customer information from before March 2019, including names, phone numbers, addresses, dates of birth and driver's license numbers. A limited number of customers Social Security and passport numbers were also obtained. The company is reaching out to those affected.

David Leary: [00:58:03] I know we didn't really talk about on the show, but a couple of weeks back, Toyota got shut down. They had to shut down all their production plants and the rumor was they got hacked. And then I don't know if you've been following this story. Also on the side, Clorox got hacked.

Blake Oliver: [00:58:16] Clorox.

David Leary: [00:58:17] And they had to shut down production of Clorox. Apparently, there's been a little bit of a Clorox shortage in the market, so they had to shut down some production. But now Clorox, they basically have stated that they're going to have significant losses on their next quarterly reports. So the these I guess if you can't function your business, it's going to hurt your business. It's not even about them stealing money from you. It's almost worse of them crippling you.

Blake Oliver: [00:58:43] Yeah. If they shut down. Yeah. Well and that's. Yeah, that's scary. If a hacker can get in and disrupt production, imagine if they got into like, utility systems and disrupted power generation or water production, you know, like that. That's the thing that really frightens me from like a terrorism standpoint.

David Leary: [00:59:00] Clorox has spent 25 million in responding to the attack. So not like paying the people, just like buttoning up systems and tech. And they probably cost a lot of money to turn a manufacturing plant down and turn it back on. And like 25 million.

Blake Oliver: [00:59:14] Wow. One more follow up, Binance. The world's biggest crypto firm is melting down. That was the headline in The Wall Street Journal. So they're facing an existential crisis due to Justice Department and Securities and Exchange Commission investigations and lawsuits and their founder, Changpeng Zhao. Their market share of crypto trades has dropped 70% to around 50% this year as rivals gain ground and jurisdictions block access to the exchange. The US arm of Binance has seen revenue fall 70%. There's been an exodus of executives layoffs of 1300 plus employees and falling morale. If Binance collapsed, liquidity could evaporate in crypto markets, crashing prices. But other exchanges would likely fill the void over time. But yeah, the the question is, is Binance a dead man walking and will it collapse and trigger another crypto crash? I think it depends on how much of the crypto trading is wash sales and is not real and is supported by I mean potentially fraudulent financials because. Binance I'm going to say it every time I mention Binance, they've still never been audited. They've said and promised they will get audited and they have never been audited. Why won't they get audited? I wonder, what could they be hiding?

David Leary: [01:00:41] Well, the thing is, the audits are there. Nobody's going to find it anyways, so. Well.

Blake Oliver: [01:00:46] Think about that. The standards for audits. Are so low. They can't even get past that low barrier to just get in.

David Leary: [01:00:57] That's a good way to present it. That's a very good good to me.

Blake Oliver: [01:01:00] Means something really bad. Bad is going on blatantly obvious.

David Leary: [01:01:04] And then after, you know, the whole FTX stuff, it's like, oh yeah, like, like you wouldn't be shocked if it was stuff just like that going on. You wouldn't be surprised in any way, shape or form. No, I wouldn't be.

Blake Oliver: [01:01:14] Surprised if there was like a big hole in their balance sheet that was like, there are not the assets there that they claim like, I would not be surprised in the slightest. And if that word got out, it's a run on the bank, the whole thing collapses and it takes down a lot of other crypto people with them because you know, they've got exposure. So none of this is real. That's like very little of it. You know, that's the thing that people don't understand is like there's not a lot of actual US dollars being exchanged for crypto. Most crypto trading is happening with imaginary fake currencies called stablecoins that are manipulated by the same people who are profiting from all the trading going on.

David Leary: [01:01:56] Yeah, it's.

Blake Oliver: [01:01:57] Like it's a very small percentage of actual crypto is bought with US dollars. I mean, what else do you need to know?

David Leary: [01:02:04] 0011 more follow up. Go for it. We the government didn't shut down. So last week we recorded we thought we were shutting down and it never happened.

Blake Oliver: [01:02:13] So I didn't think we were going to shut down. I had I had confidence. Confidence. I didn't think McCarthy would get kicked out as speaker. Oh, and well, you know, since you brought that up, we can't stop. What what is the impact on not having a speaker? Well, there's a bill aimed at extending federal banking protections to marijuana companies in states where it is currently legal on a federal basis, and that is stalled. So that's not good for those cannabis companies that, you know, they want to be able to do banking and then also discussions to reinstate tax benefits for business expenditures on research and development are also on hold. So does this put.

David Leary: [01:02:49] All bills on hold? Everything.

Blake Oliver: [01:02:51] Nothing can move forward until they pick a speaker.

David Leary: [01:02:53] Oh, that's bad because there's bills currently to make accounting stem and now there's are gonna be blocked.

Blake Oliver: [01:02:59] Are the bills actually written though or is it just discussions because I feel like it's just been discussions for a long time.

David Leary: [01:03:06] That's a good question. Maybe you can they.

Blake Oliver: [01:03:08] Figure that.

David Leary: [01:03:09] Out once it gets a number right? H.r. 303 3541, the accounting Stem pursued. Oh, maybe.

Blake Oliver: [01:03:15] 23. Yeah, maybe that is I don't know.

David Leary: [01:03:17] And then the Senate has 1705 the Stem Education and Accounting Act. Well, they're on hold.

Blake Oliver: [01:03:25] On, hold. And we will be back next week bringing you all the latest accounting news. You can follow me on Twitter. I'm @BlakeTOliver. How about you, David?

David Leary: [01:03:34] I'm on all the socials. David Leary.

Blake Oliver: [01:03:35] Send us your emails and your voicemails to the accounting podcast at earmarked me. And don't forget, if you sat through this entire episode, you can get CPE credit for it. Yes, Nasba approved CPE for listening to podcasts. Download the earmark app on the App Store or Google Play store or go to earmark Cpcomm to learn more. You already did the primary learning activity by listening to this episode. Now go on the app and take a quiz and get your credit. The course will be available on the app about a week after this episode airs on our podcast Feed. So if you're watching this on YouTube, come back in like a week and a half and you'll be able to get the course. But just download the app. You've probably listened to past episodes. You can get credit for those right now. So thank you, everyone who joined us in the live stream. Great to see you all. Stacy, Margie, Larry, thanks for commenting. We've got many more who did not comment. We'd love to hear from you.

David Leary: [01:04:30] Very active today. Very active today.

Blake Oliver: [01:04:32] Join us any Friday. We usually broadcast Fridays 10 or 11 Pacific. It kind of depends on when we get our act together. If you subscribe to us on YouTube, you'll get a notification on your YouTube app when we go live. And you can you can tune in and follow along as we report the latest news. I'll see you here next week, David.

David Leary: [01:04:50] For an episode.

Blake Oliver: [01:04:51] Bye bye.

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David Leary
David Leary
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Don Jr. Explains GAAP & Why No One's Going Into Accounting
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