The Accounting Podcast

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David Leary: [00:00:04] Intuit stock is down 33% in the last 30 days, and Xero stock is down 22%. Intuit $110 billion in market cap gone 110 billion. Coming to you weekly from the OnPay Recording Studio.

Blake Oliver: [00:00:20] Hey everyone, and welcome back to The Accounting Podcast, your weekly roundup of news in the profession. I'm Blake Oliver.

David Leary: [00:00:27] And I'm David Leary.

Blake Oliver: [00:00:29] David. Valentine's day is tomorrow, and Americans are expected to spend a record $29.1 billion on Valentine's Day this year. That's up from 27.5 billion last year, with the average person budgeting about $200 on gifts. So yeah, $200. I mean, I don't know, maybe it's just because I'm like a CPA, an accountant, but that seems like a lot on average. Well, I think.

David Leary: [00:00:59] Most CPAs and accountants would not buy because all the prices are inflated now. It just just go to a nice dinner next week or last week, right? You you don't have to or you don't have to overpay for this.

Blake Oliver: [00:01:11] Talk about inflation. Just look at the price of flowers at the grocery store. I think it's like 2 or 3 times what it is normally.

David Leary: [00:01:18] Normally. Yeah.

Blake Oliver: [00:01:19] What's driving the increase in spending. It's middle and high income shoppers. They are expanding who they buy for just beyond just romantic partners. A record 35% of consumers plan to buy Valentine's gifts for their pets this year. That's going to be $2.1 billion for pet gifts for Valentine's Day for a made up holiday.

David Leary: [00:01:41] That's crazy. That's a lot like I love my dog and all. I call her my girlfriend, but like, I don't think I'm going to spend $2 even on her this time.

Blake Oliver: [00:01:50] Gift categories. Candy. The most popular gift 56% of shoppers are buying it. But jewelry, that's where the real money is. Uh, that is $7 billion. So that's according to a survey by the National Retail Foundation. They do an annual survey of Valentine's Day spending. And, uh, I guess, you know, I better up my game here. Flowers. 41% of Americans are buying flowers, greeting cards, similar number. Evening out, 39%. That's what I'm doing. I like to spend my money on experiences. So yeah, going to a nice, you know, all inclusive or what? What do they say a prefixed.

David Leary: [00:02:34] Prefixed dinner.

Blake Oliver: [00:02:35] Dinner, that sort of thing. That's nice because, you know, even if it's expensive, you know what it's going to cost, right. But you can't eat, can't eat anything that for the whole day before because or the whole, the whole morning before or whatever. Because it's so, uh, so much food. That's my only complaint. Um, of course there are folks who don't celebrate Valentine's Day, but even those who are not celebrating 31%, they still plan to do something self gifting, self care or getting together with friends.

David Leary: [00:03:05] Maybe some of the people that are attending live in the the audience right now. Give a little heart if they're going to spend money on Valentine's Day. Put the amount of hearts based on how much you think you're going to spend. That'd be welcome.

Blake Oliver: [00:03:15] Welcome live stream viewers. We've got Dre the Dream. Good morning Dre. We've got Kisha and Tee done. Oh, six tee done. First to hit that like button. Great to have you with us and Ashley. Ashley's here. Ashley says I'm guilty of contributing to this. I don't buy for my dog, but I do for my kids. If you have not seen us on YouTube, tune in live. Go to YouTube and search for The Accounting Podcast. Hit that subscribe button, that notification bell icon. Hit that and you'll get notified when we go live and you can join us and chat with us. And today we have a special guest joining us later in the program, it's Dom Piscopo from Big Four transparency here to talk about the best and worst firms in public accounting based on hours worked. And maybe that'll convince you to break up with your firm, or perhaps find a new firm to love in 2026. So very appropriate that we have Dom joining us later. David, I have some more Valentine's Day stories, but before that.

David Leary: [00:04:26] We should get some sponsor love.

Blake Oliver: [00:04:27] Give love to our sponsors.

David Leary: [00:04:29] Yeah. Sponsors. This week we have on pay. We have UNC Kenan-flagler Business School, a new sponsor for an app called BS from Future View Systems. And then actually, believe it or not, uncW is running two ads in this episode. It's that important. So are you tired of payroll headaches getting in the way of the client experience that you want to deliver? Manual workflows, creating bottlenecks, compliance, nightmares, and endless support calls that go nowhere. There's a better way for your team and your clients on pay. Is the payroll partner that accountants and bookkeepers actually love? Why? Because it's easy to use, packed with value and backed by support that actually supports you. Their team gets rave reviews for being fast, expert, and actually reachable when you need them, and pay handles all the heavy lifting. You get a dedicated onboarding onboarding coordinator who sets up worker profiles and transfers year to date data from previous providers, all at no extra cost. Their seamless QuickBooks and Xero integrations that Blake loves eliminate manual journal entries, and they support any types of businesses you serve farms, restaurants, nonprofits, you name it. On on pay can handle unique requirements without adding complexity, and on pay keeps the pricing model simple to everything your clients expect. From multi-state filing to off cycle payroll runs is included. No hidden fees, no surprises. To book a demo, head over to The Accounting Podcast. That is The Accounting Podcast promo for Onpa y.

Blake Oliver: [00:05:53] David. Do you? This might be too personal a question, but I'm wondering, do you keep your finances separate from your your spouse, or do you merge everything, or is there something in between?

David Leary: [00:06:14] So when I got remarried, we opened up a joint account together that barely gets used. And my wife had her own accounts that her own bank that we've never closed. And I had accounts at my own bank that we never closed. So now we just have we have a shared bank that gets hardly used, and then we just have but we have access. So what I found, which is great, um, because, you know, quicken obviously went away and there's not really good personal finance apps out there. But I discovered Monarch Money. And what's great about Monarch money is it has a use case for couples. So I don't have to like give my login. Like with mint. It was it was crazy because mint would use my Intuit login, which would log me into QuickBooks and everything else, and you'd have to share your login with monarch money. You can just set up your significant other, can have their own account or their own login, but you share all the finances you can. Actually, what's great is you can even assign who's in charge of the account. So if transactions aren't categorized right, you can assign that to your spouse to recategorize these confusing transactions that might come through, but I highly recommend for personal finances with your clients. Monarch money is amazing. That was not a.

Blake Oliver: [00:07:19] Not a sponsor, just David's recommendation for a personal finance app. Well that's awesome. So basically you're you're in this kind of hybrid in the middle of.

David Leary: [00:07:29] Visibility, but we're not.

Blake Oliver: [00:07:31] Totally merged.

David Leary: [00:07:31] It's not all fully merged yet, but there's visibility.

Blake Oliver: [00:07:34] Well, that's not unusual. A new bank rate survey found that most Americans in committed relationships meaning married, living together, partnerships, that sort of thing. They don't fully merge their finances anymore. The dominant model is a version of yours, mine and ours like you, David, which keeps individual accounts while sometimes sharing accounts for joint bills and goals. So 62% of committed couples keep at least some accounts in their name only, and fewer than half. Only 38% of couples completely combine their finances these days. About a quarter, 26% keep accounts completely separate and then 36%. So a little over a third use a hybrid approach, which is that mix of joint and separate accounts.

David Leary: [00:08:27] Yeah. So can we go to dinner tomorrow night? Maybe. I'm going to split the bill and she's going to have to pay half of it maybe.

Blake Oliver: [00:08:33] Do you not have a reservation? What are you going to do? You're going to have to buy one off the internet.

David Leary: [00:08:38] I'll figure that out between tomorrow. I usually tend to cook.

Blake Oliver: [00:08:43] When we.

David Leary: [00:08:43] Get less hassle and better.

Blake Oliver: [00:08:44] All right, well, when we bring Dom on for the segment, Dave, David, you better pull out your phone and get on open table and do your best because I think you're going to be in trouble. You know, this year I remembered and I made a made a reservation early.

David Leary: [00:08:55] Good good good good.

Blake Oliver: [00:08:56] I got I got one more story on this Valentine's Day thing, and then we'll get over to Dom. Um, and this is about financial secrets. 43% of Americans say that keeping financial secrets is at least as bad as physical cheating. But almost half of people in committed relationships admit they don't know everything about their partner's finances. Nearly 1 in 10 say they're hiding what they consider major debt, expenses or income from their spouse. 1 in 10. This is from another Bankrate survey, and in this survey, the article about it, one divorce financial analyst shared a case where a husband changed his life insurance beneficiaries without telling his wife of 20 years. She had no idea until it came up in divorce mediation.

David Leary: [00:09:52] It feels like 1 in 10 seems low to me. If half of all marriages end in divorce, and a lot of times it is because of financial type situations, 1 in 10 feels pretty low.

Blake Oliver: [00:10:04] But other examples of high stakes financial cheating include secret borrowing, for example, home equity lines taken out without a partner's knowledge, financial records exposing unrelated betrayals such as affairs, and beneficiary changes like that one on life insurance without a spouse's awareness. And so, I don't know, uh, I guess what's the takeaway here? It's that, you know, when you're in a committed relationship, being open and transparent about finances is just as important as everything else. And I'm curious, like, if you narrowed this down to accountants. Like, how would this play out? Right. Or accountants more honest about their finances with their spouse? Or is it worse? Maybe we need to do a survey to figure that out. We will. Maybe someday. No. David, let's bring on our guest, Dom Piscopo. Dom, welcome to the show.

David Leary: [00:11:07] Hey, Dom.

Dominic Piscopo: [00:11:07] It's a pleasure to be here. Hey. I'm, uh. I'm unfortunately not in the live chat today. Putting the coffee emojis, but I'm seeing them come in still, so that's good.

Blake Oliver: [00:11:16] Great to have you with us and love the work you're doing over at Big Four. Transparency, which started out as like a shared Google sheet where you were collecting salary data, real salary data from real accountants trying to figure out what firms are paying and where to go if you want a higher salary. You also collect data on hours worked and you've created this ranking now of the best and worst firms in accounting. It's something you're doing annually, I think, for the last few years. Is that right?

Dominic Piscopo: [00:11:51] Yeah. So this is the third year that we're actually publishing any kind of ranking. And, and, uh, you were sort of instrumental in part of it as well. Uh, so last year, I think I had sent you over the list and you kind of sent me back. Dot, dot, dot, which are the worst places, though? Um, yeah. So you were definitely an instrumental part in, in, you know, expanding that list to also having a little bit of a naughty list there.

Blake Oliver: [00:12:18] So I'd love to know who's on your list this year. Who's who are the best firms to your Valentine?

David Leary: [00:12:24] Yeah, yeah.

Blake Oliver: [00:12:25] Who are the.

David Leary: [00:12:26] Worst? Are you breaking up with.

Dominic Piscopo: [00:12:27] Yeah, yeah. So I mean, I was actually very surprised by the top ranked firm. Um, they were kind of like a, you know, they've consistently put up really good numbers for job satisfaction, and we do. We split it up into two. So there's job satisfaction. And then there's another category for hours worked. Um, and Anderson actually ranked as number one for each of those. So I was very surprised. The reason being not because I hear bad things about Anderson, but because of, you know, the IPO and IPO readiness. Uh, I would have imagined that that would have been a very tricky year for people at the firm. Uh, but it seems like maybe the the excitement, maybe some of the financial benefits of this have have kind of outweighed that. Um, and people have, have been really happy at Anderson in 2025. Um, next up was Plant Moran. Um, so I just sent you an updated one of that I had, um, I had the number two and number three switch there, but Plant Moran was in second place at, uh, 7.73 out of ten, uh, for job satisfaction. Plant Moran, I believe, was last year's number one. They've consistently been very strong when it comes to employee job satisfaction. Um, interestingly, again, though, they were one of the worst firms when it came to submitted self-reported hours worked by firm, they were actually the worst firm. So that sort of hints to something else positive going on there. Might it be culture? Might it be compensation? That's something I'm probably going to dig into as a follow up. Maybe they are paying well above market or something like that.

Dominic Piscopo: [00:14:08] Um, but despite longer hours than most of the other firms, they, uh, ranked very high. Uh, Weaver ranked up there. Um, um, which again, is kind of bucking the trend. So April ranked number four, 7.38 out of ten. Bucking the trend of PE backed firms um, where oftentimes the kind of lower end the naughty list in terms of job satisfaction has been made up of private equity backed firms. And I've leaned on Aprio a lot as an example in presentations at conferences where it's like, you can't necessarily paint, uh, you know, every private equity backed firm with the same brush because they've, they've very much bucked the trend. They made the top five list. And then Wilfley again has been consistently strong in terms of, uh, job satisfaction. So, you know, it's good to see. Now, now the naughty list, which I know is very juicy to you, but, um, Citrin Cooperman, uh, there were among the bottom three last year as well, as well as in 2023. Um, they, they, they put up the worst ranking in terms of job satisfaction that I've seen so far. Uh, on average. So 5.13 out of ten was the average response. Uh, M and P, who's a Canadian firm who are not private equity backed but almost act a lot like a private equity backed firm. They're huge consolidators in the middle market. They're acquiring a ton of firms, uh, which I imagine could make operations a little bit more difficult. And then Cherry Becker as well was in the bottom three rounding that out.

Blake Oliver: [00:15:43] And what is the magnitude of this difference. How would you describe it qualitatively? You've got this like one out of ten ranking or satisfaction score. Is this like you you survey people working there and you say, how happy are you on a scale of 1 to 10? Is that what that is?

Dominic Piscopo: [00:16:02] Yeah, exactly. So in all of the data that we collect, so we have 21,500 rows, uh, after doing, you know, cleaning, statistical analysis and all of that where we remove invalid entries and things like that. Um, and every entry, I think after maybe the first couple of months, we started to collect, um, job satisfaction data, because I early on, when I started to see that this really was gaining traction, I was like, okay, there's a lot more to it than just salary that people are going to be curious about. Right. And so we've we've started collecting that. We probably have some 20,000 or so responses to that. So it's very large magnitude. Um, what we did is we narrowed it down to the firms where we had enough, uh, submissions for it to make sense. Right. Like, there are a whole bunch of firms who might be a perfect ten based off of one submission, right? So we tried to make sure that we were averaging at least, um, you know, around ten entries per year for that firm. So, you know, if you're at a small firm and you think it's heaven there, don't be don't be upset that it's not included. Um, but this is across quite a few. Um, you know, this is across a lot of entries. And so for conversations I have with people consistently align with what I'm seeing on, on these kind of rankings. Right. So I've spoken to a lot of folks at the firms with the lowest job satisfaction and with folks at the at the upper end in terms of job satisfaction, and their individual stories have have been pretty reflective overall of what we're seeing in the rankings. So, um, you know, keep in mind there's always exceptions to. Right, like one firm with an overall terrible culture could have one office that is very lovely as well. And I talk about that difference a lot too. Like I worked at Deloitte and I think I was surrounded by just the best people that Deloitte had to offer and had a very positive experience. So I want.

Blake Oliver: [00:18:04] To talk about the hours worked, but first, let's thank our next sponsor of this episode and that is Unk. Let's face it, the job market is especially tough right now, but every industry needs accountants and accountants are always in demand. In fact, employment for accountants is projected to grow 10% through 2026, and that's faster than most other professions. That's where Unk Kenan-flagler is master of Accounting program comes in. It's one of the top ranked Macc programs in the country, with 98% of students accepting a job offer within three months of graduation and earning more than those with just a bachelor's degree. If you're currently working full time raising children, serving in the armed forces, or living halfway around the world, there are highly flexible Mac program can also fit your lifestyle. You can choose their 12 month on campus program or their online only option, where you have up to 36 months to complete your degree. Plus, you'll join the powerful 46,000 strong UNC Kenan-flagler alumni network connections that will serve you throughout your career. If you want to set yourself up for a lifelong career, pick the Mac program with proven ROI. To see why you should get your Master's of Accounting at the UNC Kenan-flagler Business School, head over to The Accounting Podcast. That's The Accounting Podcast.

David Leary: [00:19:28] Before we talk about ours, Blake, I just have a higher level question how Dom just said depending on where you're working at Deloitte, satisfaction could be different, right? So, Dom, do you have any data that if you're in the consulting division versus the audit division where you're satisfactions might be.

Dominic Piscopo: [00:19:44] I do, yeah. So, um, I don't want to kind of misquote myself. So I'm going to actually pull it up here while we're talking, but, um, yeah. And there are pretty clear trends, um, among those. So like, for example, tax and audit job satisfaction has actually been very steadily increasing year over year since we started collecting data. Whereas consulting, advisory, risk advisory, all of those tend to be a lot more volatile. Um, so they tend to kind of go up and down a little bit more, probably based off of market sentiment. I just pulled up the analysis that we had done on that. So we share these out on the newsletter. Um, and so For basically the first time in 2025. Tax was actually the front runner, uh, when it came to job satisfaction. And I pulled this, I believe it was in August of 2025. Um, so, I mean, it was part way through the year. Um, but tax had been coming in at, uh, an average response of 7.05 out of ten. Um, that's pretty good. We had. Yeah. Advisory 6.97 out of ten. Uh, consulting around the 6.95. Um, uh, risk a little bit lower. And then audit was the lowest. However, what I found really interesting was the trend since 2023, where again, all the kind of advisory type ones were very up and down, whereas tax and audit were just very clear upward trends year after year.

Blake Oliver: [00:21:21] I would not have.

David Leary: [00:21:22] Bad. But it's on an upward trend.

Dominic Piscopo: [00:21:24] Yes. Yeah. Audit is still the lowest of the low, however, heading in the right direction.

Blake Oliver: [00:21:31] And what was the satisfaction ranking for audit in general?

Dominic Piscopo: [00:21:35] Uh 6.6. 6.6. 6.6 started. Um, so I had started this chart in 2023. It was 6.5. Um, and then it went to 6.55 and then 6.62 and tax similarly 6.666.777.05. Um, so again we're, we're moving in the right direction for some of those. And I do think some of them, you know, might be somewhat due to automation, um, you know, spending less time transposing data from point A to point B, like I've, I've spent hundreds of hours doing things like that when I was an intern, whereas there's probably a little bit less of that and you get to spend a little bit more time doing the things you like. Um, or at least learning to maybe get toward some of the things you like a bit more.

Blake Oliver: [00:22:28] Let's talk about hours. Hours worked by firm. You've got the top five and the bottom three. Give us the numbers.

Dominic Piscopo: [00:22:37] Yeah. So, Anderson, um, average response was 39. And again, these are these are self-reported hours, um, intending to be an average for the year. Um, I'm surprised.

Blake Oliver: [00:22:49] To see anyone under 40. That's incredible.

Dominic Piscopo: [00:22:52] Yeah. Well, there's only one under 40, but, you know, um. But. Yeah, don't. Grant Thornton, they're a Canadian, uh, branch of Grant Thornton. 42.5 map, uh, 43. Despite being one of the lowest job satisfaction. Uh, Weaver, 43 Aprio 43.8. And then, um, among the worst, there was Plant Moran, 47.3, cherry Becker 46.7 and Crowe, 46.5.

David Leary: [00:23:19] And I imagine this data skews low, because if someone's working a lot of hours, they don't have time to go fill out your data in your survey.

Dominic Piscopo: [00:23:26] Because.

David Leary: [00:23:26] They're working too much. So. So it's probably skewed lower than it really is.

Blake Oliver: [00:23:30] And.

Dominic Piscopo: [00:23:30] Possibly, possibly.

Blake Oliver: [00:23:32] And these are average hours across the whole year.

Dominic Piscopo: [00:23:35] So yeah, across the whole year. So in the prompt it's very intentional to say like do this across the whole year. Um, I'd be curious to know seasonally, I'm sure like some people making submissions in March, I bet you the average submission is probably higher due to recency bias.

Blake Oliver: [00:23:50] But is there generally a correlation between job satisfaction and lower hours worked. I see here that we've got Weaver and Aprio as some of the best firms to work for by job satisfaction and the lower hours, but MMP, like you said, Dom is is is not. They've got high hours worked relatively and lower job satisfaction.

Dominic Piscopo: [00:24:17] Yeah. Yeah. So they're working less hours but lower satisfaction.

Blake Oliver: [00:24:20] Sorry. Lower job. Yeah. Exactly.

Dominic Piscopo: [00:24:23] Yeah. I mean, on average, like, it tends to resemble itself. But then every year there's an outlier, like, I think last year, um, last year, I think Citrin Cooperman was among the best of everyone in terms of hours. And again, was was either the lowest or second lowest of job satisfaction. Right. So it's not it's not the rule of law. Uh, there's definitely an element of culture. I've, I've heard of some culture issues at some of the firms who are on the lower end and have spoken with partners and managers who who will kind of confirm some of these things. But then, you know, compensation falls into it as well, like some firms who I know pay very aggressively, do really well on that front as well. So yeah.

Blake Oliver: [00:25:04] How do the Big Four fit into all of this?

Dominic Piscopo: [00:25:08] Because so the big four, um, I mean, I pulled them, I so I had distilled the list down to firms where there was a high enough sample size to actually be able to have a real conversation about this. Um, so I pulled it down to the top 30 firms by number of submissions, and that brought us to around 3000 submissions for 2025. And the average in there was, uh, across all of those firms with 6.62. And the big four was pretty close to that, actually. Pwc did quite well. So PwC reported 6.8 out of ten in terms of job satisfaction. Uh, next was Deloitte 6.62, next was E 6.61 and then KPMG 6.57. So they were all pretty close to the average PwC pulling apart a little bit in terms of, um, the positives. And then they were all pretty close to the average as well in terms of hours worked. Um, so the average kind of response was 45.5 hours. And they were all, you know, within about half an hour of that. Um, KPMG actually of the big four, had the lowest satisfaction but the best hours.

Blake Oliver: [00:26:24] Mm. So yeah, that's that's fascinating. Not a total not a correlation there necessarily or a causation. It's just uh, it seems to be something else that's driving that. Well, yeah. Dom, thanks for sharing this. Um, would you like to stick around and hang out with us for the rest of the episode?

Dominic Piscopo: [00:26:43] Sure. Why not? I was hearing some of the pre-show topics and it sounded very interesting.

Blake Oliver: [00:26:47] So as usual, a lot of technology, a lot of AI news. David, you have a story here about how accounting firms could be disrupted by AI startups.

David Leary: [00:26:59] Let's jump.

Blake Oliver: [00:26:59] Right in talking a lot about.

David Leary: [00:27:01] This is so I saw this tweet and it's just been stuck in my brain the whole entire week. So I'm going to share my screen and I'll read the tweet. This is from a hunter horsley. I don't even know who this guy is on Twitter. I have no clue who he is. Right? But he said in 2006, every section of Craigslist was a $1 billion marketplace startup waiting to happen in 2026. Every section of PwC's website is a $10 billion AI startup waiting to happen, so I'll just drill down. So he has two images. So one image is a screenshot of Craigslist, you know, back in 2006. And if you look at it, Airbnb, Zillow, indeed, ZipRecruiter, Reddit offer up Tinder next door. All of these SaaS startups in the last 20 years appeared on the market, and they sliced and diced Craigslist, essentially.

Blake Oliver: [00:27:51] Which was a website where you could basically, um, how would you describe Craigslist? Right. I want to sell something. I want to buy something. Classifieds. Right. Classifieds.

David Leary: [00:28:01] You could date, you could do all this stuff there. And now all these billion dollar startups happened, and they just attacked that one little section at a time. And his argument, by showing the screenshot of the PwC, let me go back one screen. And this is an attack on PwC or service business. Right. He's here's all the capabilities of PwC audit, insurance, consulting deals, digital assets and cryptos. Ai and engineering, enterprise strategy, front office, managed services operations, all metaverse, all tax services. All these all these items on their menu. There's probably an AI startup attacking that menu item of what they're.

Blake Oliver: [00:28:40] Going after, solving that problem for a business using tech automation instead of people.

David Leary: [00:28:46] Yes. And and this in my brain, I'm like, this is exactly what happened to QuickBooks desktop. So QuickBooks desktop, every menu in QuickBooks desktop got attacked by a SaaS startup, the vendors menu attacked by Bill.com and the bill payment ones. Payroll companies like on pay attack the payroll menu. Every menu in QuickBooks got attacked by a third party. Saas startup. So then you know, Intuit's like, hey, we better get all these apps to integrate with QBO. And so they worked. Then they eventually said, hey, even better, why don't we just acquire some of these apps and or build these features in QBO? So now it's all built in. But now if you think about the cycle starting over again, all these little AI startups are now going to be attacking all the features of QuickBooks, all the features of zero if including the GL part. Right? It's the whole cycle is restarted. We just went through this and and and it's scary for accounting firms going by that PwC menu. Like it's not going to be accounting is not going to take your job. It's going to take away the business unit at the firm you work for. And then you won't have a job.

Blake Oliver: [00:29:49] Well, that's a scary thought. Uh, and it's not just accountants that are under threat. I actually think there's another industry that is going to be disrupted first, and that is wealth management and financial planning. And it was a story in CPA Trendlines that clued me into this. They wrote about this new startup called Hazel AI. It's an AI powered tax planning app. And when this app debuted, it crashed the stocks of wealth management firms. Um, Raymond James went down 8.87%, LPL financial down over 8%, Charles Schwab down 7%, stifle down 7%. Morgan Stanley down 3.5%. These public brokerage wealth managers, these firms that are offering financial planning and wealth management at scale to Americans are, the market seems to think, going to be disrupted by AI startups.

David Leary: [00:31:02] And we don't have data on this on the big four or big accounting because they're not public companies. So we don't know what the street thinks about, you know.

Blake Oliver: [00:31:10] What's going to happen to them. Pwc yeah. Mhm. So what does Hazel do. Simply put it will take in your tax return your form 1040 your pay stubs your account statements. And it will draft personalized tax strategies in minutes by applying tax logic. And if you think about it that's kind of basically what these large wealth managers do. They just have a system for taking in all this data. It's keyed in by people, and they work out these strategies to help you save money, to help you save on your taxes. And then they sell them to you and they take a percentage of your, uh, your equity basically every year. And it's a very expensive thing because they're employing these, you know, wealth managers, these professionals. And if an AI app can do that at scale and do it well enough, They can undercut these fees. They can, you know, stop taking a percent or whatever it is of your portfolio. And I think it's something that Americans are really interested in signing up for, because when you look at the survey data, we are really willing to trust AI for financial advice. According to a new survey from Best Money, which is a financial comparison platform. There is now widespread and growing consumer reliance on AI for financial information and guidance. A huge percentage, 82%, say they trust AI for financial information and guidance. And over half, 58% have used AI to seek financial guidance. 82% say they're using AI for this more often than 12 months ago. What are the topics they are asking about? Investing, budgeting, saving, then taxes, and then retirement planning? And a full three quarters have taken action or made a financial decision based on AI guidance.

Blake Oliver: [00:33:17] And of those who acted, 65% said the outcome was good and 64% are saying their finances improved since they started using AI, and almost three quarters are also saying they feel more confident about their finances since using AI. And I have a personal story about this, I was trying to figure out how to adjust my withholding because I didn't. I didn't have, you know, I, I had a tax bill last year. I expect to pay. And I want to minimize that this year. Right. So what is something that we as CPAs do a lot. Well, it's we take the the pay stubs, the w-2s from our clients, and we try to figure out how to help them adjust their withholding and estimated payments so that they, they don't owe or they get close to zero, or they hit that safe harbor every year. And this is complicated when you've got like an S Corp and you've got multiple w2's and you've got investment income and all this stuff, it can be tricky. So I set up a ChatGPT project, and I took my pay stubs and I dropped them in there, and I explained what happened last year, gave it my tax return, and I said, hey, you know, help me adjust my withholdings. So I'm not going to owe a big bill this year. And it worked.

David Leary: [00:34:31] There's a standalone product here, actually, now that you've said this, because my kids are starting to enter the workforce and filling out a W-4 is crazy these days. It's not.

Blake Oliver: [00:34:41] The new one is awful.

David Leary: [00:34:42] It's horrible. It's very, very hard. But they don't know what to put like, like, are you doing it right? And there could be an AI startup where you basically upload your paste, your generic pay stub that you think you're gonna get the whole year, a little bit more demographics, and then it pumps out your W-4 to give to your employer, like there's a product there. You charge them five bucks, ten bucks to get that service. It's totally worth it because it's called ChatGPT.

Blake Oliver: [00:35:04] It already can do it.

David Leary: [00:35:05] Yeah, it I can do it. Yeah, but you can mark it as a separate service. I bet you totally could build something like this.

Blake Oliver: [00:35:11] Now, I know the accountants out there, tax professionals are saying, wait, wait wait wait wait. This this is not going to work. It's not going to be accurate. You're going to get errors. And, uh, you know, Dre, the dream here in the live stream says entrusting a software system that will have more inaccuracies than a human doing the same operation. And that may be true, but think about it this way. What did it cost me to do it? And how accurate is what I got? And for most people, it might be good enough for the price. So we have to stop thinking as a profession about is the AI going to be as good as me and think about, is the AI going to be good enough to replace what I'm doing? And should I be embracing it with my team in order to speed up the work that we're doing for clients? So in your firm, you could create a shared project in Claude or ChatGPT, or a custom GPT that does this with detailed instructions about your process and your firm for doing it. Maybe you've even got an Excel worksheet that you use to calculate this, that you could give it, and then it could fill out using agent mode, and you could speed up this kind of work. You could delegate this. Maybe a partner a manager doesn't have to do it. Maybe a staff accountant could do it and prep it for review. So that's the opportunity right? Is to get the efficiency and get the accuracy by having the human review and the process in place.

Dominic Piscopo: [00:36:38] I feel like some of this stuff like just to, to kind of weigh in. Like I feel like a lot of this stuff, you know, the humans role often is to provide comfort and almost like taste, right, via their lived experiences and what they've seen with other clients and things like that. And I feel like that is going to remain a little bit safer than the simple execution. Right? Where you say, oh, I needed to fill out a new W-4. I think, sorry, I'm Canadian, so some of the form names are a little bit foreign, but, uh, you know, fill out a W-4, and this is kind of, you know, can you prompt me through a set of questions? I think that that's probably, you know, definitely on its way out for, for human execution. But, you know, even for the wealth advisors and things like that, like there's always been a sense of like being able to just follow some of these people who just publish all their trades. And, you know, there's always been the availability to just follow something like that. And I think where people, you know, will still rely on that is where they just say, either I have a ton of anxiety around this and I just want someone to deal with it, so I don't need to open it or, you know, something along the lines of like, I need to be handheld through the ups and downs and spoken to and someone who has a proven track record. So I think like, yeah, I think some of the rote execution stuff is certainly at risk. But like I do think where taste comes into play or lived experiences, I think that might be a little bit safer.

David Leary: [00:38:09] And also if you compare it to how they're getting this advice already, most are not using an accounting or accounting firm. And I can look at my son. My son got a job at a car wash and he's he's asking me some tax questions based on advice he's getting from other 19 year olds that work at the car wash. Like, what do you should be doing with his paycheck and what is withholding should be. And if he's going to get it, if he needs to even file taxes. I'm like like, they're not. This is it's basically letting people without the knowledge get access to some of the knowledge. It's not so much we're going to rip knowledge away from an accounting firm and do it myself.

Blake Oliver: [00:38:39] Right? There's a whole market out there that's underserved that just can't afford the services of a CPA or an enrolled agent, or.

David Leary: [00:38:46] It doesn't make.

Blake Oliver: [00:38:47] Sense.

David Leary: [00:38:47] Or tax prep for my kid working at a car wash to hire a CPA to understand his withholding. It just makes no sense.

Blake Oliver: [00:38:53] And so maybe the opportunity is for firms. It's to create some sort of offering to serve this market that wants what you said, Dom, which is the hand-holding or the assurance of somebody experienced. Signing off on this, saying this is good and the AI that.

Dominic Piscopo: [00:39:15] Yeah.

Blake Oliver: [00:39:16] Would be ideal. Right. That's what we all want. And you could do it perhaps at a lower price if you had the automation in place.

Dominic Piscopo: [00:39:22] So and it may even generate work for people. Right. Like I, I had someone on recently, I had a conversation with who was talking about, you know, these really bad TikTok gurus, but that, um, the bad tax advice being passed around has actually been really beneficial to them because it will surface things that they then feel like, oh, I need to have a conversation with my CPA about this. And although they'll see, you know, this, this tax guru put out just absolutely terrible advice that'll probably land you in prison. Um, it actually like, at least got the ball rolling for the people to be prompted to bring this forward because they're like, you know, I know enough to know that I shouldn't just blindly follow this. But I know now, based off of what I've seen, that there is actually a conversation to be had here. And so, like, that's kind of the counterpoint. There is like this, this could drive some work for, for firms who are on top of that.

Blake Oliver: [00:40:19] Let's thank our next sponsor and that is BS. Are you drowning in QuickBooks data entry while your company needs strategic financial insights? Here's the thing. You didn't become a comptroller or work in fpna to spend your days on repetitive tasks. You're meant to be a strategic business partner, not a data processor. That's where BS from Future View Systems comes in. Be easy. That's BS stands for Be Easy. And it's exactly what finance work should be. Imagine having digital teammates that actually understand finance and accounting working around the clock to handle your complex workflows. These aren't just chatbots, they're intelligent AI agents trained specifically on your QuickBooks online. Data and finance and accounting practices need to analyze and compare invoices against contracts and journal entries done in moments. Want detailed transaction reviews or instant financial insights? Bezzi handles it all while you stay in control. You can work on their web platform in your browser, or use their Excel add in for greater flexibility. What used to take hours or even days now takes minutes. You can finally focus on driving strategy and value for your organization. To see why finance leaders are making the switch to be easy. Head over to The Accounting Podcast. That's The Accounting Podcast forward slash.

David Leary: [00:41:45] So what was the name of that app you said that caused this? These stocks to crash?

Blake Oliver: [00:41:50] Hazel.

David Leary: [00:41:51] Hazel. So we're seeing this pattern right now. Two weeks ago or whatever it wherever it was. It was anthropic demoed some legal services app, and then the street went to all the legal tech companies and just demolished their stocks. Well, this has also been happening with accounting. So I don't know if you've kept track. Intuit stock is down 33% in the last 30 days, and zero stock is down 22%. And to it, $110 billion in market cap gone 110 billion. So what's happening now is both the Intuit CEO and Xero CEO have gone on the offensive. And basically they think they understand AI better than the street. And their messages are pretty close to each other. Um, they they believe Wall Street's misreading the AI revolution, and they think that the real long term winners are going to be companies like Intuit that deeply understand their customers and own proprietary data. So that's from Intuit's CEO, Suzanne Goodarzi. But also, if you look at what Xero CEO Sundar Singh. So how do you say her name? I'm demolishing it. Um, Sukhwinder Singh Cassidy. So she got it that I got it at that time. So she's she's arguing the same thing that because zero has an ecosystem of trust and they have the data, it makes cloning zero impractical. So they both I mean, in a way think they have this moat, which I'm not sure, like I'm not sure a lot of people believe because they did the stock. Wouldn't it be these stocks would not be getting crushed right now?

Blake Oliver: [00:43:22] Maybe it's a good buy. I do think they have a moat. It's the trust in the system. The reason that QuickBooks has been dominant for so long and competitors haven't been able to displace it, is because it's the trusted general ledger system of record for accounting for small and medium sized businesses. And to replace that trust is really difficult. Sure you could you could also clone it. People have built general ledgers and tried to disrupt. But then you also have to build the whole user interface. And if it's not familiar and easy to use, then nobody's going to switch. And so you.

David Leary: [00:44:02] Have to build the marketing engine. I mean, if you think about even zero, right, zero if zero has learned any lesson in the last decade, it's very hard to disrupt an incumbent.

Blake Oliver: [00:44:11] G.l. oh yeah.

David Leary: [00:44:12] Zero spent billions and tens of billions of dollars and made basically no dent on QuickBooks. So I could see where zero is, like, nobody's going to disrupt us.

Blake Oliver: [00:44:21] And at the same time, Intuit can change the QuickBooks interface and make it harder to use. And I hear from accountants all the time about how they hate the new nav bar, and yet nobody switches. Everybody just puts up with it because it's what everybody knows and uses. It's the standard. So I think the street's getting it wrong on Intuit in zero. And if I were picking stocks, I'd be picking them up at a a cheap price because AI is not going to disrupt the G.L.. What it's going to disrupt is all the processes around it. What you do with that data, how you analyze it. I think it's the wealth managers like we saw. Those are the stocks that should have dropped a lot. It's the um, you know, it's the the tax planning stuff, the simple stuff. Um, you know, maybe even like, well, maybe, maybe Intuit will get hammered with TurboTax because I do think that AI is going to help disruptors create tax engines. Finally, that could compete with like a TurboTax. Because if you think about it, what is TurboTax? What are any of these tax prep apps that it's just a bunch of logic that fills out the forms and interviews you and asks you questions and then puts the numbers in the boxes.

Blake Oliver: [00:45:43] And that's been really hard to disrupt because the tax code is so complex. I mean, it's so enormous in the US that you can't even at least until recently. I don't know if you can do it now. I couldn't even get the tax code to fit into the context window of an AI. Um, so it's it's actually like build all that, though. Might be easier. Like, I did this thought experiment where I thought, what if you created an an AI agent for each form, for every form that the IRS puts out and all you did was train it on the instructions, give it the instructions, and tell it how to fill out the form and make that its job, and then link them all together. And you could basically build a tax filing engine that way. It might be really inefficient and cost prohibitive from a prompt standpoint, because it would use a lot of tokens to do it. But maybe you could use that method to figure out how to create the logic engine. That would create a new type of TurboTax. Yeah. So I'm curious if there are startups out there doing that. I mean, I know there are startups. Um.

David Leary: [00:46:53] I don't have examples specific to that, but I did see an article about what folks are vibe coding. So rewind. Like what's vibe coding? You're using an AI prompt to create an app. Yes.

Blake Oliver: [00:47:03] And yeah, that's basically the same thing. Yeah. Okay. What are they using it for?

David Leary: [00:47:06] And so they're not they're not doing major things like they're not people aren't vibe coding a Salesforce or a QuickBooks or a zero or a new TurboTax even. Right. But what they're using it for, there's four big use cases for small businesses rapid prototyping. So if you need a prototyping something you don't have time for your engineers to build it for you. It's being used for rapid prototyping. It's being used. And this is probably more specific to our space and our listeners. Small businesses are building internal tools that match their workflows. No more settling for the software you're paying for. And then they're building out little simple SaaS tools. So think about even our own company. But like all these SaaS tools, 50 bucks a month here, 40 bucks a month here, 65 bucks a month here. They're replacing these small bolt on add ons one at a time. And then you're getting this like custom, real, true custom software solutions.

Blake Oliver: [00:47:56] Yeah. It's like that Hubdoc clone that I made where I can forward a bill to an email address and it'll enter it into the accounting system. I mean, that that's something I made myself, but that was like an app that took millions and millions of dollars to build in the past.

David Leary: [00:48:12] And then the last one, which is weird, like I didn't even highlight it, but turning slide decks into interactive demos. So and I could see if you're just getting your feet wet with vibe coding, you're like, hey, take the slide deck and make it like an interactive demo of our product we want to build. But that goes back to like the prototyping. But really the key is so today it's replacing small $40 apps. But when is it going to be I'm going to vibe code my own Salesforce vibe code my own QuickBooks. Like is that. And that's what the Street thinks is going to happen. And I kind of believe it a little bit that that we're going to get to the point where people are just going to build their own ERP from scratch.

Blake Oliver: [00:48:49] I believe I'm with you on vibe coding little features of apps, but QuickBooks, you look at a system like QuickBooks or an ERP like NetSuite. There are so many little features that you would have to build and to link them all together.

David Leary: [00:49:07] But do you? Because you're probably even using most of those features.

Blake Oliver: [00:49:11] I. It's possible. I mean, yeah, but I think it's going to take a long time for us to get there. And I think there's a lot more opportunity for disruption in less complex areas. And GLS are complex. Accounting systems are really complex. And I think this is one thing that like finance people miss because they, you know, they took accounting and they blasted through it. So they get to the fun stuff and they forget just how complex debits and credits are and all of the different modules around it. And the subledger.

David Leary: [00:49:41] Only builds matching. Everything's matching in reconciliation. That's not accounting. Yes.

Blake Oliver: [00:49:46] And then when you get to, like, inner company, it just goes. It just the it just explodes. Right.

David Leary: [00:49:51] And in between crash and accrual.

Blake Oliver: [00:49:53] Yeah. And you know, those finance bros never took, uh, never did consolidations. Right. That's my guess. Hey, David. What a nightmare.

Dominic Piscopo: [00:50:03] All right.

Blake Oliver: [00:50:03] Sorry I'm taking you back there. Yeah. Giving you some some trauma response. Uh, let's think our last sponsor, uh, which is actually one we already talked about, and that's UNC.

David Leary: [00:50:13] So. Yeah.

Blake Oliver: [00:50:14] Go for it.

David Leary: [00:50:15] I get it. Yeah. Earlier we talked about how strong the demand is for accountants. So let's talk about what actually separates you in the market. A master's degree or even better, a master's in accounting or even better, a master's in accounting from UNC. Unc Canon's Flaggers Master of accounting program isn't just highly ranked, it delivers results. 98% of students land a job within three months of graduation, and they typically earn more than candidates who only have a bachelor's degree. You can probably verify this with Dom's site. Possibly one day. That's a real return on your investment. And here's what makes it practical. It's flexible. You can compete. Complete the program in as little as 12 months on campus. Or if your life is busy. And let's be honest, usually is. You can go fully online and take up to 36 months to finish. It's designed for working professionals, parents, military service members, and students around the world. You're also stepping into a 46,000 strong alumni network from UNC Kenan-flagler connections that can open doors long after graduation. If accounting demand is strong and it is, the question becomes how do you position yourself to take advantage of it? Uncw Kenan-flagler is master of accounting can help you do exactly that. To learn more about the Macc program at UNC Kenan-flagler, head over to The Accounting Podcast. That's The Accounting Podcast.

Blake Oliver: [00:51:32] All right. I got one more story to take us out, and that is a follow up. It's about Carvana. Remember talking about Carvana a while back.

David Leary: [00:51:42] Dave Hindenburg, the big short seller, discovered there's a shady loan things and like.

Blake Oliver: [00:51:48] And then the related entities.

David Leary: [00:51:50] There's a lot of weird stuff going on. I don't remember all the details.

Blake Oliver: [00:51:53] So there's a new report out from another short seller and this was highlighted in CFO comm. The short seller is Gotham City Research, and they make an accounting argument for why something might be going on that's shady behind the scenes at Carvana. Carvana, for those who are not familiar, is a direct to consumer online used car retailer. They also have a few physical locations, but it's mostly online. And their business model is this hybrid retail plus financing model. And it pairs vehicle sales with loan origination, servicing, warranties, and other products. And the report by Gotham City Research highlights the long standing relationships that Carvana has with drive time and Bridge Crest. These are entities that administer Carvana customer loans and package them for investors sale, and they are related entities that are owned by members of the family that owns Carvana. And what this what the accounting part of this story is that, um, and what the short seller is questioning is carvana's margins and say they can't reconcile them with industry norms. The unit economics don't make sense. In other words, Carvana claims over 5000 profit per used vehicle. Now, used vehicles don't sell for a lot of money, right? 5000 in profit is very high. The typical used car gross profit is 1500 to $2000. So we're talking like 2 to 3 three times what a typical used car would would weigh you. Could you? Gross.

David Leary: [00:53:44] The only way your company could exceed industry standards by that much is you have to have some proprietary technology or some system that allows you to do that, or you're fudging the numbers. I think there's only two options on how to hit those types of margins.

Blake Oliver: [00:53:57] Right. And Carvana has this online model which lowers their costs. But I'm curious whether that is actually included in the gross. You would think like like the physical locations might be below that. I'm not sure. The short sellers, the analysts are wondering whether those margins, like you said, David, reflect improvements in the core retail business or are these related to profits from the loan, sales and securitization, or is it the effect of intercompany arrangements among the family connected businesses? So the Carvana sells the car and packages this loan that is created by like a financing entity that is giving Carvana these like unrealistic, unrealistically favorable terms like subprime loans essentially. And are these loans actually any good? And Carvana has historically served subprime and near-prime buyers who can't get a Carvana.

David Leary: [00:55:03] When it was those other two CarMax and drive time those other companies they owned. Right.

Blake Oliver: [00:55:07] Yeah. And here's something suspicious. Carvana's website says that you can get financing based on just $10,000 of annual income, regardless of credit. Does this sound familiar? Sounds familiar to me. Wow. So this continues to go on, and, um, you know, I'm I'm I'm curious, like, how, like, is this are these related entities? I mean, it just seems suspicious to me. Right. And so I've been paying attention to this, and I wanted to highlight it on the show. And sometimes all you need to I guess the takeaway is sometimes all you need to detect something fishy going on is to look at the look at the margins. If it's too good to be true, maybe it is. Accounting matters. All right, David, that's all the time we have for this week. Thank you to our sponsors. Dom, thank you for joining us. Tell us more about Big Four transparency and where people can learn more.

Dominic Piscopo: [00:56:07] Yeah. Thanks for having me on. It's, uh, it's a pleasure, as always. Long time listener. So, um. Yeah, I mean, so Big Four transparency is we're the largest crowdsourced database of accounting salaries on the market. Um, you know, we have a free offering for accounting professionals to figure out what you should be compensated. And the data is only as good as what we make it together as a community. So, you know, if you can spare the two minutes to make an anonymous submission on the website, that's always hugely appreciated and not only by me, but will be hugely appreciated by the next person in your situation who wants to understand what they should be compensated. Um, and so yeah, you can check all of that out at Big Four transparency Comm. We do a bunch of other things as well. But, uh, the, the mainstay really is the compensation data that we collect and display for you all.

David Leary: [00:56:59] And, Dom, have you seen anybody try to game your, your website yet? And what I mean by that is I've seen companies do this with Yelp. Hey, all the employees go to Yelp and write a review or go to uh, what's the glass door, right. Oh, go and write reviews because we're getting bad reviews on Glassdoor. Has any like have you seen any data where on one day a bunch of employees from the same firm are like saying their job satisfaction is great at that firm has firms pulling that stuff those games yet?

Dominic Piscopo: [00:57:25] We have not. But I mean, I think it's us, you know, us. This grows, particularly as the best and worst grows in sort of notoriety. Potentially, that will be something that we're going to want to, uh, you know, keep an eye on for sure. Um, right now, what's nice with some of that is that it's it's so secondary and like, this isn't one of those things of, you know, the best employers or things like that where it's, you know, it seems like it's a little bit of a captured system. We really, first and foremost are just like, hey, we're out here collecting this data. This happens to be one of the fields, and we didn't tell anyone or anything like that that we're going to be doing reporting on this, right. So maybe in two years it'll be something that we need to, uh, to take a look for. But, uh, as of right now, it's it's it's doing well. And, I mean, anytime there's something fishy with a submission, like I said, like, we quarterly will subject it to pretty rigorous, you know, statistical analysis and cleaning and things like that. We remove the entry altogether. So, I mean, if there was a huge rush of that, we would hopefully pick it up. But yeah, definitely something to keep an eye on.

Blake Oliver: [00:58:35] Thanks to everyone who stuck with us to the end of this episode. You can earn free continuing professional education credits, Nasba approved CPE and IRS CE credits for listening to this show and many other fine accounting and tax podcasts with the earmark app. Go to Earmark app in your web browser or download the free app for iOS or Android. Get it on your mobile phone. Sign up for free and earn one free CPE every week. Get ahead of your requirement. It's February. You can do it! Don't wait until the end of the year. And support us by subscribing to earmark. You'll get premium content. You will, uh, get rid of ads, and you'll support the work that we do. And we appreciate all of our subscribers. And don't forget to. You can get a free, um, not a free. You can get a team subscription for your firm so that everyone in your firm can have free CPE on the go, and you can even send us your internal trainings, your videos of your lunch, and learns your live sessions that you've done at your firm. We will put those on the app on a private channel just for your firm, and then your team can earn CPE on the go for the education you are already delivering. If you're interested in learning more about that email sales at earmarked, sales at earmarked. And if you want to send a Valentine's letter, note email to us at The Accounting Podcast. Email The Accounting Podcast at me. That's the Accounting Today at earmarked. Great to chat with you, David. I'll see you around here next week.