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In this episode, Blake and David examine the story of the 15-year-old who recently passed the CPA exam, as well as recent news involving accounting firms transitioning to corporations, AI investments, and new laws concerning AI hiring. They also cover several tech stories related to accounting, problems with client portals, and much more!
Chapters
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Chapters
- (00:04) - Preview: Accounting firms will transition to corporations
- (01:00) - Blake and David are back from their trips
- (05:03) - A 15-year-old in Mississippi has passed the CPA exam
- (07:00) - Jennifer asks about TAP's TurboTax Live Business experience
- (10:05) - Mackenzie's voicemail re: accounting shortage
- (18:37) - BDO USA is shifting from a partnership to a corporation
- (20:55) - EY officially announces it has called off "Project Everest" but is still the number one US audit firm for public companies
- (24:25) - M365 Co-Pilot updates
- (29:50) - Thomson Reuters announces $100 million per year AI investment
- (32:04) - Avalara launches a sales tax calculator in ChatGPT
- (36:17) - Gusto hires former head of data science and analytics from Google
- (37:09) - Taxfyle releases AI tax-prep bot
- (39:04) - New York announces new AI law for hiring
- (44:15) - A few more quick tech stories and the problems with client portals
- (47:06) - Wrapbook wrap-up
- (51:45) - Where to reach David and Blake
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Show Notes
Tech News: TaxFyle releases AI tax prep bot
Why everyone is mad about New York’s AI hiring law
Mississippi youth passes CPA Exam – at Age 15
BDO USA is Shifting From a Partnership to a Corporation - CPA Practice Advisor
Gusto hires former Google exec to add AI to products | Accounting Today
KPMG cuts 5% of U.S. workforce | Accounting Today
KPMG’s Big Four Dominance on Bank Audits Shaken by Failures
Thomson Reuters adding AI to tax software | Accounting Today
EY Tops Rival Audit Firms in Public Company Clients - CPA Practice Advisor
Shopify vows to fight CRA request to hand over records from more than 121,000 Canadian businesses
Accounting firm EY calls off ‘Project Everest’ to break up firm ...
Finance Automation Platform Ramp Acquires AI Startup Cohere.io
BDO USA is Shifting From a Partnership to a Corporation
M365 Copilot, Microsoft’s generative AI tool, explained
Intuit Supercharges Intuit GenOS with OpenAI’s Large Language Models to Bring GenAI Experiences to Customers
Wrapbook Expands its Payroll Platform to Enable Seamless ...
Kraken ordered to turn over its users' information to the IRS
Some Chicago Restaurants Are Still Adding Surcharges Of Up to 20% to Checks. Should They?
As Thomson Reuters Explains Its Acquisition of Casetext, Some Investors Seem Uncertain
Get in Touch
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Creators & Guests
What is The Accounting Podcast?
The Accounting Podcast (formerly the Cloud Accounting Podcast) is the world's #1 accounting, bookkeeping, and tax podcast! Join us weekly for a roundup of accounting news, analysis, and interviews. Plus, earn free NASBA-approved CPE credits for listening with the Earmark app. Learn more at https://earmarkcpe.com.
Please note: 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] So easy prediction. For the next few years, we're going to see more and more partnerships turn into corporations just because it's easier. And when you actually look at the compensation structure for partners, in a lot of ways, they're already like employees and there's this, you know, supposed equity, but that only gets paid out to you when you retire is, you know, this deferred compensation, like just get rid of it, right? Like that makes sense to get rid of it and just pay people out what they earn.
David Leary: [00:00:36] Coming to You weekly from the OnPay Recording Studio.
Blake Oliver: [00:00:41] Hello and welcome to the Cloud Accounting Podcast. I'm Blake Oliver.
David Leary: [00:00:45] The former The Cloud Accounting Podcast. It's now the accounting podcast. That's no, I.
Blake Oliver: [00:00:49] Did it again.
David Leary: [00:00:50] It's going to take practice. All right.
Blake Oliver: [00:00:53] Welcome to the accounting podcast. I'm Blake Oliver.
David Leary: [00:00:56] And I'm David Leary.
Blake Oliver: [00:00:59] Happy 4th of.
David Leary: [00:01:00] July. Yeah, happy 4th of July. I think we saw each other in Saint Louis. It's going new heights. Holiday week has been crazy trying to schedule to get this episode recorded, but we finally are back at our houses. Not remote anymore.
Blake Oliver: [00:01:14] And yeah, I went to LA, it was hot in LA, and then I went to Disneyland and it was actually not too hot at Disneyland. Took my eight year old, my wife and I went and we had a blast. We're practically Disney adults now. I think we've been three times in 18 months. So we're definitely part of that pandemic revenge spending group.
David Leary: [00:01:35] But you're not going just you and your wife. You're taking your kid. So yeah, yeah, yeah.
Blake Oliver: [00:01:40] Yeah. I mean, we have we have we have an excuse to be there, although you don't need that anymore. Like, you can just go, you can be an adult and be into Disney and like, the world is a wonderful place now. It was great, though. Like, the lines were really short. I think everybody went on 4th of July and they have all the technology now at Disneyland where, you know, you use an app to book your place in line. And so a lot of people do that. So now you don't have to wait in line anymore. You just go and spend money in the park. You know, you go shop, you go eat. So even though the park was super busy, the lines were not very long. And yeah, we did everything we wanted to do.
David Leary: [00:02:12] And now you're back in 150,000 degree Phoenix.
Blake Oliver: [00:02:16] Now we're back in reality. In Phenix, it's 100. I mean, it's like there was an article in the New York Times about how, like, we might beat the 18 day streak, I think is the record for days over 110 degrees. So we're aiming to beat that in the next few weeks. So I'm inside and I have nothing to do but record podcast episodes, so I'm eager to talk about all the news with you.
David Leary: [00:02:37] David And so I did my traveling myself. I went doing a destination wedding at a all inclusive place and reminds me of what you talked about, like bundling. You don't really know what you're paying for stuff because it's all bundled up in one price at the end.
Blake Oliver: [00:02:52] Oh yeah. Last time in our last episode we talked about the benefits of bundling.
David Leary: [00:02:56] It's really hard to figure out like, did I get my value or not? Do I want to spend this? Or can I just eat at the buffet for free? Like it plays a lot of price games in your brain. But eventually, through these travels I met up in Chicago, Daughter played in the national Volleyball championships. I was there for 4th of July and this time of the year is beautiful in Chicago.
Blake Oliver: [00:03:14] Oh yeah, it's great. That's the reason I went to college in Chicago is because I visited in the late summer.
David Leary: [00:03:22] And I was like even like looking. I was like, maybe next year I just go there for a whole month and we get an Airbnb when it's super hot in Arizona, we just go live in Chicago in the summer. But I did remember what you said about Winters there and maybe it's not a good idea.
Blake Oliver: [00:03:34] Yeah, don't spend all year there if you can avoid it.
David Leary: [00:03:36] And the one thing in Chicago that that I noticed they were doing that it's kind of a holdover from COVID and then maybe you can do this with your own clients. Possibly. But they auto opt you into an extra service fee. So this is not a tip, it's just 3% extra they stick on your bill.
Blake Oliver: [00:03:50] Is this every.
David Leary: [00:03:51] Restaurant? Not every restaurant, but a lot.
Blake Oliver: [00:03:54] And what's the what do they call this charge?
David Leary: [00:03:57] Every restaurant explains it slightly differently, but they frame it as a way to pay for insurance for their employees. Now, you could ask to have it removed. So like it's auto opt in charge and was like, well, what if you do that with clients or just like, Hey, we're going to charge you this extra fee every month? And so you ask us not to charge you.
Blake Oliver: [00:04:15] We had one of those. We called it our technology fee, and it wasn't my firm. It was at the big firm that I worked at. And we just added a surcharge to every bill. And if a client complained about it, then the partners would generally remove it. So I think this is not I don't know if it's common practice, but it definitely happens. Did you ask to get your charge removed? David No.
David Leary: [00:04:36] Because every time I even though it was on the menu, they disclosed it before you ordered your food. But then by the time you eat and you get your check, you forget it. And then for that time, it's too late. Well.
Blake Oliver: [00:04:45] The big news I saw over the 4th of July weekend was that a 15 year old in Mississippi has passed the CPA exam. Jimmy Kilometers, a 15 year old from Mississippi, has become the youngest person to pass the certified public accountant exam. He graduated from high school at age 12 and obtained a bachelor's degree at 14 and then completed the exam in just six months. He plans to specialize in tax law and hopes to use his accounting skills to help people with their financial problems. He studied about five hours a day and advises others to continue living their lives while preparing for exams. Wow.
David Leary: [00:05:20] 15.
Blake Oliver: [00:05:21] Yeah. And he knows he wants to be a tax attorney. All righty. And I guess he I think I saw that he passed the bar as well. Like something. I mean, yeah, he's going to. He's going to. Oh, he passed. Sorry. He didn't pass the bar. He crushed the law school admission test. And he's going to attend law school at Loyola University in New Orleans this fall.
David Leary: [00:05:41] So he's going to go back to school. He's not going to go work for one of the big four because I was thinking about this. This could be the window to expose because there's a lot of child labor laws for 15 year olds. Uh huh. And like, if he went to work for one of the big firms, they won't be able to work him 80 hours a week. And this could be a this could be the the exposure that people need to see about the working conditions in big firms. But he's not going to take a job.
Blake Oliver: [00:06:08] Don't feel too bad if you're listening and you feel like you're not a high achiever because he did have to retake one section. He had to take financial accounting and reporting twice after coming up two points shy of passing with a 73. Oh, well, I've got that on him, but pretty impressive. Yeah. Youngest ever. He got an article in Journal of Accountancy.
David Leary: [00:06:29] So I mean it makes it less impressive about ChatGPT passing it now 15 year olds can pass it.
Blake Oliver: [00:06:36] Well, what else. What else is new?
David Leary: [00:06:38] What else? Have some news, I think.
Blake Oliver: [00:06:42] Yeah, we got to talk. But actually, I just remembered we got some listener mail. We got an email and a voice mail, so. Perfect. Let's. Let's get to that. Let's let me read this email first. This came from Jennifer. Aloha. I believe I heard that you are using TurboTax lives new service for S-Corp, tax preparation and you are going to be sharing your feedback about your experience with all your listeners. I was super excited to hear about this and would be extremely interested to find out what the client experience would be like for that service. Can you confirm if anyone at TurboTax or Intuit is aware that you are doing this? Because if they are aware, then I'm sure Intuit will give you the white glove service and this will be a very biased and unauthentic test, which really can't be used as an expectation of how someone else's experience would be with the same product. And honestly, since it was announced on the air that you were doing this to your very large audience, I would have to assume it's extremely unlikely that the staff at Intuit are unaware that this is going on. In the worst case scenario, even if you do get the white glove treatment, we can just view the results of this test as the best case scenario, and then maybe others can call in and share with the non white glove treatment was really like and how it differed from your experience. Looking forward to the results. Mahalo, Jennifer. Drought of Aloha Accounting and tax. P.s You guys are the absolute best. The content of your podcast is extremely relevant, valuable and always interesting. As the solo owner of a very small firm. I'm so grateful for this content.
David Leary: [00:08:06] Thanks for listening and thank you.
Blake Oliver: [00:08:08] Jennifer.
David Leary: [00:08:09] Would you say that we got white glove service?
Blake Oliver: [00:08:12] I don't think we did. And that video, that video is still forthcoming. I don't think that our preparer knew who we were. So thank you, Jennifer, for, you know, stroking our egos there with the large audience. But I don't think our audience is large enough where the random tax preparer that we were assigned at Intuit TurboTax knows who we are.
David Leary: [00:08:33] So and my guess and this is this like great leadership, poor leadership, like there could be possibly a leader at Intuit, maybe. No, we did this. And a good leader at a company or a firm would step back and just see how it plays out so they have an honest view of their own company versus the white glove thing. So, you know, I suspect, yes, somebody at Intuit probably knew we did this. As far as we can tell, there was no interference or contact or anything like that.
Blake Oliver: [00:09:01] So stay tuned. We still have not released the video. We're putting the final finishing touches on it. And I hope to have it for you very shortly. We will let you know on the podcast when it is available. And I guess like what would be the best way for people to get notified when that happens? Join our join our email list.
David Leary: [00:09:21] Join the email list, follow us on all the socials.
Blake Oliver: [00:09:23] Follow us on social media.
David Leary: [00:09:25] Smash that subscribe button. That's what all the kids say these days. Smash that subscribe button on the YouTube and the video will go out on YouTube and you can actually see the windows in the screens. But we also probably just take we'll probably take the audio and just shove it into the podcast feed as well.
Blake Oliver: [00:09:39] So that's what we'll do. So just stay tuned to this podcast and you will get to hear what our experience was. All right. Now we have a voicemail from Mackenzie Patel who we got to meet at Bit Waves Enterprise Digital Assets Summit in Austin. I think it was in Austin, right. She had the best.
David Leary: [00:09:58] Presentation of all the presentations.
Blake Oliver: [00:10:01] It was great. Yeah. So here's Mackenzie.
Mackenzie Patel: [00:10:05] Hi, Blake and David. It's Mackenzie Patel, founder of Hash Graphics. We briefly met at the Bitwidth conference back in Austin in April. And as I think I told you, I'm a huge, huge fan of the accounting podcast and earmark in general. And so I wanted to share some of the highlights of what I've learned so far. So first off, all of your conversations about GPP and how can we use an accounting art is so fascinating. I'm a big fan of I I've actually been using this tool called Perplexity to help a lot with accounting questions in my practice. I especially love the episode chat. Gpt was set up to fail the CPA exam because, well, of course it was. There was no way GPT wouldn't pass the CPA exam if it could pass all of these other tests. And for someone who's grown up with digital technology all of my life, I'm so excited for GPT to automate most of my work so I can focus on the highest level of accounting, like overall strategy for my clients and really just being their financial counselor and partner. And so second off, I didn't even know that there was a talent shortage in accounting. The first time I heard about this, I was honestly so shocked. I graduated from the University of Florida in 2020 and is a massive feeder school for the Big Four, especially for the Tampa, Miami and Atlanta offices. And so there restrictively catered almost every day to the accounting building, and all my friends had job offers by their junior year, basically all of them. But now that I've learned about the talent shortage, this, I guess you could call it a courtship.
Mackenzie Patel: [00:11:31] It makes complete sense now. I think only one of my friends from UF is still at the Big four, almost three years since we graduated. So this upper out system and extreme burnout is is quite real, which is why I chose to skip the board, skip the Big Four experience altogether. And so again, and I guess talked about the talent shortage a lot, but I read something the other day that I wanted to share with you, so I just finished reading this book called Managing the Professional Service Firm by David Meister, and it was first published in 1993, so 30 years ago. This book is all about how to run and manage a professional firm like an accounting or legal or architecture firm. And some parts of it are pretty old school, like the billable hour model. And thanks to you guys, I know all about value pricing and subscription model pricing now. But there was one particular part I was honestly flabbergasted at. So chapter 18 is entitled Surviving the People Crisis, and David Mazer explicitly talks about the impending talent shortage. And he called us out 30 years ago. Now, for starters, his reason was purely demographics. So one of the quotes is in every developed economy, the percent of the population in the 25 to 34 age group has started to decline from its 1985 peak. It will continue to fall over over the next 20 years and the US to decline from 23% to 17% of the total population in the next 15 years. And the 70s and 80s, there was an abundance of young workers because it was the baby boomer generation, right? More women were also working, so the worker supply was cheap.
Mackenzie Patel: [00:13:03] So then I asked about that same demographic in 2021, and it says, As of 2021, 14.2% of the US population was between the ages of 25 and 34. So that's a drop of about 8% of young, educated workers that all these big firms are relying on. The book didn't get into burnout, overwork, low pay, etcetera. On the contrary, he says, the supply of workers, or since this doesn't supply workers, was shortened, it was inflated salaries for all these new workers, which is clearly not happening. Right? So my friend who started working at the Big Four, I think his starting salary was 60 2KA year when my other friend, who was a software engineer and big tech, earned 110 K as a starting salary. So quite the difference. So the book goes on to say, quote, The real impact of the fuel crisis will be felt in absorbing the high cost that will result from competition for educated young workers and continuing to make the professional firm career path attractive in an environment when mid-level employees will receive numerous headhunter calls. So it seems the billings have remained the same for these firms, but the wages have not exponentially increased to match this shortening supply of workers. So I can totally see how big reckoning is coming for Big Four was able to hire mostly my entire class on Chick-Fil-A sandwiches and free happy hour, which I think are less expensive than 110 K per year per new hire. So finally, David May started with strategies to combat this pupil shortage.
Mackenzie Patel: [00:14:24] And the first one was to hire paraprofessionals, which he defines as people who do not have traditional qualifications and can be hired at a lesser cost in the traditional group. So the kind of predictive outsource or offshore laborer and as you're envisioning, still a US labor force maybe without a CPA or master's degree, but in reality it was taken outside the US. And they also mentioned a related solution to hire nontraditional candidates. And so the author said these people don't really want careers. They're fine with working at the same job. I realized not having the same pressures as trying to advance in an upper out system. So, for example, hiring people in their, let's say, 40 or 50 who are working for their or looking for their second career or moms are entering the workforce. Again, I think both viable strategy and a third one where you get more technology. The author mentioned getting a computer to speed up processing, which is kind of funny considering the whole cloud accounting renaissance in the past ten years. But of course, obviously it ties back to AI and the potential it has for accounting. So again, thank you so much for all the work you both do for the accounting podcast. It was so great meeting you both in person and it's been illuminating and truly the best way to keep up to date on what's going on in the accounting profession. I really think this podcast should be a requirement for any accountant out there. So all right, Thanks again so much and have a great day.
David Leary: [00:15:41] Wow. Wow is a great voicemail.
Blake Oliver: [00:15:43] Thank you so much, Mackenzie, for all that info and for listening and for the kind words. We really appreciate it. It's funny that the talent crisis has been this slow moving disaster for years and years and years, and maybe that's why nobody has figured out what to do about it or done anything like really meaningful because it's just been very slow.
David Leary: [00:16:04] But yeah, I mean, the the baby boom population issue is just one part of this. And and that should be the only part of this we should have to deal with.
Blake Oliver: [00:16:12] That's what's precipitated all of this. It's fewer young people have more options. There's fewer workers and there's plenty of jobs. And so they can take their pick and they're not going to pick the ones that make them work long hours for low pay. It's really simple.
David Leary: [00:16:28] Chick fil A, you.
Blake Oliver: [00:16:28] Get no matter how much Chick fil A you get or how much you talk up, how great the profession is, People are very simple. They don't want to work 60 or 70 hours or 80 hours, and they want to make good money and they can do that correctly.
David Leary: [00:16:43] Everyone in our Mac program went to work for Big Four. Only one still does.
Blake Oliver: [00:16:48] Well, and that's the way those firms work, right? Like most people spend 2 or 3 years there and then are out. The problem with that is we need accountants, not just at Big Four firms like they may be having their needs met because people are willing to go there and work a few years for a low salary because they're getting that resume experience. They're getting that very valuable Big Four experience on their resume. But what about all these smaller firms that, you know, there's nobody left for them? Or what about all of these cities and corporations, the smaller businesses, the main street businesses that don't have enough accountants? Well, I.
David Leary: [00:17:26] Think the bigger issue, right, it's fine if people want to go to the big four and get some experience and then they stay as accountants and work in other parts of the accounting industry. But I think the problem is the experience is so poor that they just bail from accounting entirely.
Blake Oliver: [00:17:39] And that's what the evidence shows, is that we have a retention issue when it comes to the big firms. They're churning and burning people and those people are leaving entirely.
David Leary: [00:17:49] Yeah.
Blake Oliver: [00:17:50] Because they don't want to work the long hours anymore. Nobody wants to work long hours. Why? Why should they if they don't have to? You know, just because you did it doesn't mean that other people are going to do it. You did it because you had to. I mean, I'm not talking about you, David. I'm talking about the. No, no, no.
David Leary: [00:18:05] The the you. Yes, yes, yes. You being we, we or the. Because I'm older. So you're like I'm like, oh, David's a he would be a stereotypical white male senior partner at a at a firm if I was an accountant. There you go. Yeah.
Blake Oliver: [00:18:18] Well, speaking about change in our profession, there's a big change coming to one of the largest accounting firms in the United States. Bdo USA is shifting from a partnership to a corporation. I spotted this in CPA practice advisor, and I guess it ties into your Chicago trip because they are based in Chicago. David So Chicago based accounting firm BDO USA LLP will change its name to BDO, USA A on July 1st. I guess it already did as it transitions from a partnership structure to a professional services corporation based in Delaware. This move will provide advantages such as lower corporate tax rates, simplified tax filing for partners. So basically all the partners are now going to be employees of the corporation and they'll get a W-2 and they've said that it has they have no plans to pursue a private equity deal. So it doesn't have anything to do with that, at least on the face of it. The sixth largest accounting firm in the US by revenue with 2.49 billion in revenue for the 12 month period ending April 30th, 2022. So. Easy prediction. For the next few years, we're going to see more and more partnerships turn into corporations just because it's easier. And when you actually look at the compensation structure for partners, in a lot of ways, they're already like employees and there's this, you know, supposed equity, but that only gets paid out to you when you retire. You know, this deferred compensation, like just get rid of it, right? Like that makes sense to get rid of it and just pay people out what they earn.
David Leary: [00:19:54] And the other advantage of this and maybe doesn't understand this or who knows where this is in their plans, but once they turn into corporations, they now can offer ownership to lower level employees that are not partners.
Blake Oliver: [00:20:04] Now, I mean, theoretically, they could.
David Leary: [00:20:07] In theory, they're.
Blake Oliver: [00:20:07] Stuck. Right? They could offer options and that'll be the next thing that happens. Right, is to retain managers. We're going to start giving them stock and then maybe even the staff will start earning it, which is great because it's it's sort of tearing down this barrier, this wall that's always been between partners. And then everybody else, right? Partners have equity, everybody else does not. And I think we're going to have to start offering equity to more and more people if we want to keep them, just like tech companies do. And I don't know if you saw like you might see in the Big Four with EA, so they've officially announced. I think it's really, really official now that they've called off Project Everest. You know, they're they were going to separate the two. Yeah. Visions. So it's official. I think it's officially off. There's even a internal note that was seen by the BBC. We acknowledged the challenges with separating some of our businesses that have the deepest technical expertise in a way that gives both organizations the capabilities they need to compete in the market effectively. So they kind of couldn't figure out how to do it. Yeah, like in the end, I got more news. Apparently, despite Project Everest failing, they are the number one audit firm in terms of public company clients.
Blake Oliver: [00:21:26] Audited. The most public companies registered with the Securities and Exchange Commission between March 2022 and May 2023, according to an analysis by Audit Analytics. It's a pretty high 14.4% of all SEC registered public companies, and they gained 25 new clients over the past year. The big four, of course, is one dominated the market share of large accelerated filers auditing 88% of this market. Deloitte is the top audit firm of both accelerated filers and non accelerated filers. So depending on how you decide who's, you know, the biggest or got the most entitled Deloitte or.
David Leary: [00:22:12] I don't have anything else on the Big Four or even top ten per se.
Blake Oliver: [00:22:17] Well, stay tuned for our next episode featuring our guest Merrell Johnson of Being Ninjas because she's in Australia and we're going to talk to her about what she thinks about the PwC scandal in Australia. So I will save all of the latest news on that.
David Leary: [00:22:35] For next for.
Blake Oliver: [00:22:36] Next episode, for.
David Leary: [00:22:37] Next week, next episode.
Blake Oliver: [00:22:38] So we move on to tech news.
David Leary: [00:22:40] Yeah. Or we could jump into AI. So this is an article that was in Computer World on June 26th and actually really breaks down Microsoft's copilot. So that's going to be I think they call it m365 now, I think is what it's called. It's not Office 365, it's Microsoft 365. And you get a giant suite of 10,000 things, all from Microsoft, which is good because that's what firms have. So the M365 Copilot system consists of three elements Microsoft 365 apps such as Word Excel and teams where you'll interact with the AI assistant in there. Microsoft Graph, which includes your files, your documents, your data across all your Microsoft 365 environments. So think about folders on your network, folders on your hard drive. They're going to have some sort of copilot navigating between all those documents. And then there are OpenAI models, which will be the user prompts either through Openai's, ChatGPT, ChatGPT for Dall-e, Codex, Codex and embeddings. So they're all and then all of these models are going to take place on the Microsoft Azure Cloud. So there's kind of three copilot waves or products that are coming out right now. It's available in an early access trial. So Chevron, Goodyear and General Motors are all testing the new AI assistant in office or M365 right now. So they're already testing it and they plan on applying. Go ahead.
Blake Oliver: [00:24:11] Sorry, I don't mean to interrupt, but I saw that it's available now in Windows in the if you're if you've got the developer build like the the beta basically version of Windows early versions. Okay. Yeah. Now you can start using Windows copilot. So like you could do it right now if you sign up for that.
David Leary: [00:24:25] Just switch to that. Yeah, but it's not a risky build of windows. But yeah, I saw the.
Blake Oliver: [00:24:30] Reviews though, and the, the reviews are like underwhelming. People are saying you can't like comparing it to some of these assistants like Clippy where it actually can't do that much yet.
David Leary: [00:24:42] So they said it's like Clippy.
Blake Oliver: [00:24:45] Oh man, I hope it's not. I hope it's not another Clippy. That'd be so disappointing.
David Leary: [00:24:52] And they said ahead of its full launch, they will roll it out in small things like you'll see some of it in OneNote and OneDrive and SharePoint and Viva. I don't even know what Viva is. Viva!
Blake Oliver: [00:25:02] That's like their HR tool.
David Leary: [00:25:04] And then they also their edge browser. You're going to start seeing this and so it's rolling out. But I don't think some of those videos and some of the features we think it's going to have could still be a way off. Mm hmm.
Blake Oliver: [00:25:15] Yeah. So right now you can use it and it's basically it gives you access to some Windows features, like the ability to to change some settings, but not all. Here's a quote from PC World Windows Copilot has been programed to cut through all the clutter and menus and to do what it tells you to do. So far, unfortunately, this has been limited to just a handful of actions which include switching to light or dark mode, taking a screenshot and little else. Phrasing occasionally matters too, just as some chat bots can be fooled into following an action or question by rephrasing it. Copilot refused to switch to light mode once when I phrased it poorly, though it then learned and didn't repeat the mistake. Advanced users probably won't see much value from this as they can either navigate quickly to whatever submenu they need. Use a shortcut or find some other way of doing what they want. For the average user, though, this is extraordinary. Windows has always lacked a robust help function and this is an opportunity to help users do what they want to do. Full stop. So maybe this is the promise of Clippy finally realized.
David Leary: [00:26:19] Yeah, I think, you know, I could be used for copy paste. Like think about these repeated actions you do all the time. Like it should just. Windows should start guessing. When you highlight something. You probably want to copy it. Write a piece of text.
Blake Oliver: [00:26:31] Or what'll be amazing is when, you know, you could just have like QuickBooks or Xero Open in a tab in Microsoft Edge and you could chat with Windows Copilot and tell it to do things right, and it could recognize the interface and understand what to do. It would be like having a tool. That's the real promise of it. It could actually layer on top of all these websites where we do stuff. And so you could you could basically tell it to run a macro, you could describe a macro and.
David Leary: [00:26:59] Say create an invoice with this stuff. And then it would just create the invoice. It would open up. Yeah, it.
Blake Oliver: [00:27:03] Does all the clicks, it does all the keyboard input. Right? That that's exciting. But we're not there yet.
David Leary: [00:27:09] No. So Intuit released a press release and I'm going to really just say press release because it basically says nothing. But here's the here's the headline. It says Intuit Supercharges, Intuit genius with openai's large language models to bring new experiences to customers. But it really doesn't have a lot of meat of what this means. So it sounds like because we've talked about how Jen, in the past couple of episodes, how Intuit and their knows what they're building, how many patents they have and all of that, they're opening this up to OpenAI and ChatGPT. Like is it a plug in? Are they going to is that going to appear on an Intuit site to interact with financial style data? None of that's very clear. Just it basically says they're going to be working with OpenAI and that's about all.
Blake Oliver: [00:27:59] So a press release to announce. We're working on it. Hey, at least at least Microsoft released something. Good for them. Speaking of companies that have announced that they are working on things. Thomson Reuters says it is adding AI to its tax software, according to a story in Accounting Today. Thomson Reuters plans to invest 100 million per year in artificial intelligence starting next year with a focus on integrating the technology into its tax research and tax preparation systems. The company has already made significant investments in AI. They acquired an AI legal assistant startup called Casetext for 650 million. They're going to use AI to create more efficient workflows, provide faster entrusted answers, blah, blah, blah.
David Leary: [00:28:48] We're going to see a lot of companies just make acquisitions because it's a as a hiring technique. I think I saw a ramp the you know, the credit card charge business expense app. I think they acquired a startup as well. I think we're going to see a lot of that happening. But speaking of AI that's actually been released, did you see that Avalara launched a sales tax calculator plug in for ChatGPT?
Blake Oliver: [00:29:13] Yes, and I played around with it. Oh, you did? Yeah. And well, you can ask it to calculate the sales tax for a particular transaction and you know, it'll ask you for the address and yeah, it'll give you the rate.
David Leary: [00:29:28] So, so it's so, so their plug in is. Doing the math or just giving you the rate based on the nexus?
Blake Oliver: [00:29:34] I think it can do the math and the I don't remember exactly what I did because I did it like a week or two ago. But yeah, I mean, basically it can it's like talking to somebody who knows the sales tax rates.
David Leary: [00:29:45] Now try it. If you're an end user that has ChatGPT and you do this plug in, is it a special plug? Is a special instance of ChatGPT that you only ask sales tax stuff to? Or does it just supplement your whole ChatGPT experience?
Blake Oliver: [00:29:58] No, no. So, so the way it works is yeah, I would say it's the second. It's the latter. So you, you log in to ChatGPT and you install the plugin from the, you know, the store and then it enables the chatbot to have access to Avera's database so it can go query for you and then you can have a conversation with it.
David Leary: [00:30:20] So maybe that's how the Intuit stuff might be, where if, if companies with some proprietary knowledge could open up their data to ChatGPT, it really makes ChatGPT that much more useful.
Blake Oliver: [00:30:31] So this is a great example of expanding ChatGPT s database to current information through avalara. And the same thing could be done for tax research. Somebody could create a plug in that gives you access to the current internal revenue code and then ChatGPT could use that to go do research for you. So the the era of like massive hallucination and out of date information will come to an end once. The database is current and these plugins are being utilized.
David Leary: [00:31:05] So if you're a big firm and you're a senior partner with some special expertise in some tax thing, you're super specialized and don't know mergers and acquisitions. I'm just making something up because I don't know. This is why I'm a podcaster. So in theory. Your firm that the technology and the resources could capture your knowledge. Maybe you have it in word docs. Who knows? You just have a lot of this knowledge. You could put that in as a plug in and other people in the firm could install your plug in. In theory, instead of asking you questions directly. Could use this to. Pick your brain for a minute. Yeah. Yeah.
Blake Oliver: [00:31:45] So all these people that are saying like, Oh, you can't use ChatGPT for research and all that stuff, like, yes, you can't right now. It's trained on old data, but you're going to be able to very soon and we're all going to be using it every day. I'm convinced I'm already using it every day for, you know, non accounting and tax stuff. It's just a matter of time until it gets the information in there to do that, too. We're all going to be using it.
David Leary: [00:32:06] So I confess I used it on an airplane flight.
Blake Oliver: [00:32:09] What did you use it for?
David Leary: [00:32:10] So with earmark, we have a back end that's not very useful for getting data out of. Yeah, and it gave me the results in a format called Json and I wanted to put it into Excel. And Microsoft has like an importer and I didn't have patience to like go through the Wizards and like fix the fields and get it to import correctly. And I was like, You know what? I bet you ChatGPT can do this. So I opened up ChatGPT and I said, Take this Json, I just pasted it in and make it a CSV file. And then that didn't work because we have episode titles with commas in the names. Oh yeah. So then I said do it again with pipes. You gave it to me. It brought into Excel like nothing.
Blake Oliver: [00:32:49] Do it again. With what?
David Leary: [00:32:51] Pipes? You know, the little vertical pipes as the delimiter in between the fields instead of commas. Yeah. Imported right into Excel like nothing. And so that's where this gets really powerful because what used to take lots of clicks and this sounds dumb, but it used to take learning, right? Yeah. Didn't have to learn how to do this. And it got. It got me to the same ends. Right. I got what I wanted out of it, which was this data over here into Excel on a table the way I need it. Right.
Blake Oliver: [00:33:19] Well, continuing on with I you mentioned that a lot of these AI acquisitions are acqui hires. Google lost an exec to gusto. Gusto hired the former global head of data science and analytics at Google, Jeremy Welland, and made him the company's new head of data. Wow. Yeah. So big win for gusto. I know that they are. They're likely looking to go public soon. So they're they're building the team up to to get that, you know, big company expertise.
David Leary: [00:33:53] And they're starting to build a bigger data play beyond just running payroll right They they bought a payroll calculations company now to where they could start offering services like Avalara does for sales tax but for payroll. Right. And so they're they're just not a payroll company anymore. Payroll app, if you want to think about it that way.
Blake Oliver: [00:34:12] I got more news Tax file has released an AI tax prep bot. It's a generative AI tax prep bot that will streamline the tax filing process. It uses artificial intelligence to automate various tax related tasks, making it easier for users to file their taxes accurately and efficiently. What else does it do? So the main thing that it seems to do that is exciting is it will look at the last year's returns and then figure out what to ask for this year, which is what we've talked about as a major use case. David Creating the tax request. Yeah, the creating the tax organizer, the checklist. And so the way it does that is it does OCR, you know, converts all that text into tokens and then runs them through the model to figure out what do we need this year based on last year's return? And it will create a tailored checklist of clarifying questions and required documents. At the same time, the model can also monitor chat communications between the client and professional, identifying key information, addressing queries and highlighting any potential areas of concern that require human attention. That's according to a story in accounting today. So I don't know. It's exciting to read that. I wonder how it works in real life if any of our listeners have used tax files, a tax prep bot or have access to it. I would love to hear what you think about it.
David Leary: [00:35:44] Well, it also feels like it's out of season right now, too, right? Like, are you are you in that communication phase with a lot of your clients right now, which is good because then it'll people will tip toe in the water, but it'll be next busy season. There's going to be lots of apps doing this. Yeah, next, next May, when we record this podcast, there's going to be crazy stories we're going to have about the way people use different parts of AI to prepare taxes.
Blake Oliver: [00:36:07] There's also a new AI law in New York. We're starting to see some of these reactionary or what's the word reactions to AI. So in New York. Well, let's just step back for a second. I think a lot of companies are using some sort of automated processing for parsing through resumes for job applications. And they've actually been doing this for a long time, not just with AI, just with automation. Right? If somebody doesn't have the right experience when they submit an application, automatically reject them. Nobody ever sees the application. And these are incredibly valuable tools because you might get 500 applications for a job and there's no way that you as a, you know, business owner or firm owner are going to be able to like, sort through that, right? So you have the tool that you're using weed out 90% of them. So you only look at 50. Well, a lot of these tools are now, you know, adding on AI, which makes it even more sophisticated. And in New York, there's a law now it's called the Automated Employment Decision Tool law that requires employers to inform candidates if they are using AI in the hiring process, and they have to undergo annual independent audits to ensure their systems are not biased. Because that's one of the complaints about AI, is that it copies the biases that we have.
David Leary: [00:37:31] You train it on. Yes, because.
Blake Oliver: [00:37:33] It's trained on datasets that are human generated and humans may be biased. Violations can result in fines of up to $1,500. Proponents see it as a positive step towards regulating AI and addressing discrimination. But, you know, public interest groups, civil rights advocates believe the law is under-inclusive and may not cover all uses of automated systems and hiring, and the effectiveness of independent auditing is also questioned. I found the independent auditing part really interesting here, like the fact that businesses are going to have to be audited for their hiring practices. Like how is that going to work? Is that an opportunity for accounting firms to do these audits? If you're in New York, I would be looking into this because it could be a gold mine. All these businesses are going to have to get audited. Who's going to do those audits? The mandated audits will have to evaluate whether the output of an AI system is biased against a group of people using a metric called an impact ratio that determines whether the text selection rate varies across different groups. The audits won't have to seek to ascertain how an algorithm makes a decision, and the law skirts around the explainability challenges of complex forms of machine learning, like deep learning. So, like.
David Leary: [00:38:52] It. So this this is an opportunity for the AICPA, actually. So just like there's the Soc2 compliance. Yeah, right. Yeah. Like create some standard for AI ethics. I don't know. And they could have a little badge. They could sell. A lot of firms get to jump into this business model now. Yeah. This seems like a perfect opportunity to create more work when we don't have bodies to do it.
Blake Oliver: [00:39:17] There's a trade group called BSA, which includes Adobe, Microsoft, IBM. They are criticizing the law, arguing that the third party audits are not feasible. Here's a quote from the executive director of Stop Albert Foxconn. There's a lot of questions about what type of access an auditor would get to a company's information and how much they would really be able to interrogate about the way it operates. It would be like if we had financial auditors, but we didn't have generally accepted accounting principles, let alone a tax code and auditing rules. So we've got this new law that requires independent audits of AI hiring practices. But.
David Leary: [00:39:56] But no guidelines.
Blake Oliver: [00:39:57] No guidelines.
David Leary: [00:39:59] And I could create those guidelines and and they could use to perform the audits, like take everybody out.
Blake Oliver: [00:40:07] Have the AI do the audits. Yeah.
David Leary: [00:40:10] Um, I have some app news you want to jump into. Some of that I found was interesting. Let's go. So one is like high level and it's interesting because we removed the word cloud from the name of our podcast. And I remember the early days of cloud. One of the fears people had was like, Oh, then the IRS can just connect to the server and see whatever they want, right? And there was this logical or illogical fear of that happening. Well, maybe those people weren't so tinfoil hatted after these two stories I saw come out this week. So one of them was Kraken. Kraken, which is one of the cryptocurrency exchanges.
Blake Oliver: [00:40:47] Oh, Kraken. Yeah.
David Leary: [00:40:48] Kraken. Kraken. Sorry. Yeah. The there's no it's. See? Yeah, I get it. It's pronunciation. But the way it's spelled, it's like the n like.
Blake Oliver: [00:40:58] The mythical monster, the Kraken monster. The Sea Monster.
David Leary: [00:41:02] So cryptocurrency exchange. Kraken, Kraken, Crack, crack, crack. Kraken was ordered by a judge to provide a wide swath of information about its users to the IRS for the agency's investigation of an underreported tax liability. Now, I wasn't going to bring this to the show, just that story. But there's another story that has occurred now. This is in Canada, but Shopify vows to fight a CRA. That's the revenue agency. The IRS of Canada requests to hand over records for more than 121,000 Canadian businesses.
Blake Oliver: [00:41:35] I heard about that story. So the the IRS of Canada, the CRA, wants Shopify to give them data. Does it do we know what data they want?
David Leary: [00:41:44] No, it's not very. They want six years of back channel records for Shopify stores. Wow. And the founder, Shopify CEO, Tobi Lutke Lutke, he's he wants he's going to fight this. He thinks it's overreach. But this is going back, you know, 15 years ago when people cloud first started coming like and now these fears are happening, right? So give me 100,000 records, Boom.
Blake Oliver: [00:42:08] The fear is if you have your data, your accounting and finance data in the cloud, that the government can come and ask for it, demand it from the service providers. So go get it right. Right.
David Leary: [00:42:21] Go get it. If you want 100,000 QuickBooks desktop files, you got to like, there's some work on your end to go do that. But now they can just get swathes of records like this and just pile them all in. Yeah.
Blake Oliver: [00:42:35] I don't know. I guess they could always have done that with desktop files, right? They could, you know, demand your QuickBooks desktop file if they had the authority to do that.
David Leary: [00:42:44] 100,000 separate times in a row, they'd have to do that, right.
Blake Oliver: [00:42:47] As opposed to just making a demand from. Yeah, yeah that's true. That's true.
David Leary: [00:42:52] It's it's so it's kind of a yeah, that's an interesting thing that's kind of happened bubbled up. And then what's another interesting thing that I saw do you remember rap book. We've talked about them before. They're like movie movie production payroll.
Blake Oliver: [00:43:06] Yeah. Specifically for film and TV production companies.
David Leary: [00:43:11] Yeah. So now they're moving out into expense tracking and tracking receipts and purchase orders on movie sets as well. So they're turning into a full blown accounting system slowly but surely. Obviously, they would never do the revenue side, probably. Yeah. But all the expenses that are happening in a movie, they're tracking that. And then here's another one I thought you would find interesting. There's an app that was I never really saw it get traction here in the States, but I guess in the UK and maybe Down Under, it was an app called Tim Works. Have you ever heard of this?
Blake Oliver: [00:43:44] Tim works? No.
David Leary: [00:43:45] So from the best I could tell, it's like a chat app. So if I'm using zero and text and auto entry and I need to clarify some conversations about a transaction, it's like a chat program for you and your clients. Well, they completely shut down and the reason they shut down is no matter what they could do, despite their best efforts, they could never really get clients to use this tool. Yeah. And so, so that's the the big trick with all of this stuff. You roll out things for your client and they just don't use it.
Blake Oliver: [00:44:18] They don't use it. That's the big problem with portals. It's always been the problem. Half will use it, half won't. And if half don't, did you really get a lot of benefit out of it?
David Leary: [00:44:29] So then we think like, oh the the onboarding portal, right. Your your tax organizer. If that becomes an ChatGPT are people just not going to want to interact with that either? Like is it just people fundamentally just lazy? Yes, people.
Blake Oliver: [00:44:45] Are fundamentally lazy, lazy. We need to recognize that and you got to meet them where they are. So but but also as a firm, you've got to have limits and. And so if you're going to use a tool like that, you need to say to every client, you must use this tool to communicate with us and you're not allowed to use any other means to communicate with us. So whatever you choose has to be full featured enough to to work for that. That's why I always say that anyone who makes a client portal needs to figure out how to integrate email, because ultimately you're going to have situations where somebody has to email you something and then it goes outside of the tool. If the tool doesn't have email integration.
David Leary: [00:45:28] Now, when we did our TurboTax live, did we have to use email or was it everything through?
Blake Oliver: [00:45:33] We couldn't use. We couldn't use email. We had to use it through their tool. So I guess that was a that was a I guess I'm wrong. That was an example.
David Leary: [00:45:40] But they had to call you, right? They called your cell directly.
Blake Oliver: [00:45:43] Right. And I couldn't call them. But the only way I could communicate, the only way we could communicate with our tax preparer was through their chat based tool portal. So if you're if you're if you force the clients to do that, it works. They have no other. We had no other option, no other way to do it. So maybe. And the answer is we need to be tough. As firm owners.
David Leary: [00:46:06] I've thought about that before. I, you know, intuit a lot of these events. Sometimes we'll have a special area for Proadvisors and it's like a journey or a special room. And one of them, the one year the theme was like getting your firm fit right and all these things. And I was like, One of the things should be like a punching bag and just help people just like get tough with clients, you know, like just being a little tougher with these types of things. Because you're right, it's very hard to dictate anything down to your client. Well, the.
Blake Oliver: [00:46:34] Hard part, too, is like changing behavior. If you've had a client for years that has always emailed you or always texted you, getting them to use some other tool is like very difficult and we don't want to. I've been there, I've tried. It's really hard to to change client behavior and hardly anybody ever gets to start from scratch. And that's always the challenge is converting everybody, getting them over to a new system, getting them to not use the old one.
David Leary: [00:47:03] Especially when you're like, Oh, but this is different than the tool I put you on two months ago or.
Blake Oliver: [00:47:07] Two years if you've been switching them better.
David Leary: [00:47:09] This time.
Blake Oliver: [00:47:10] Yeah, exactly. Well, that's why the email integration, you know, helps because then the clients who are communicating with you that way, they're used to it, you know, they just keep doing it. And then you can get newer clients on, say, a chat tool, but you've got it all in one place. That's the key. And that's my philosophy is, is you can't abandon the old in favor of the new. You got to have a transition, a way to to migrate people over.
David Leary: [00:47:37] Yeah. Like just only new clients use this tool. Yeah.
Blake Oliver: [00:47:40] Well, David, I think that's all the time we got this week. Where can people find you if they want to follow you online?
David Leary: [00:47:45] I'm on all the socials, just @DavidLeary and even on threads now. Me too.
Blake Oliver: [00:47:51] I don't really want to be though I don't see the point. I feel like it's just.
David Leary: [00:47:55] A twitter to get my name locked.
Speaker4: [00:47:57] In.
Blake Oliver: [00:47:57] Yeah, I did it because they made it easy. That was what was smart actually is they just said port your Instagram profile over to threads and there it is. But now it's another app and I had to turn off all the notifications because I got a zillion notifications every time somebody followed me. And yeah, I unless Twitter crashes and burns, I don't see threads changing things. They should have just built it into Instagram. I would have I would use it if it was in the Instagram app. I just don't want another app. Nobody wants another.
David Leary: [00:48:25] App. It's another it's another inbox. Yeah. Thing, which just goes back to another chat tool. Like you want to put your clients on some other chat tool. Like if too many, it's too many.
Blake Oliver: [00:48:36] I am at Blake t Oliver on all the socials, including for the time being threads follow us on YouTube. We are the accounting podcast on YouTube and like us and subscribe there. You'll get notified when we go live and it's always fun to have you join us live. We are not live for this episode, but we are almost always live for the other ones. Um, and we'll see you around here.
David Leary: [00:49:02] And our new handles. So we're not the cloud accounting pod anymore. We're just a pod act.
Blake Oliver: [00:49:08] Pod. That's us. So. All right, David. See you next week.
David Leary: [00:49:12] All right. Bye.