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Blake and David examine the downfall of FTX and founder Sam Bankman-Fried and look at some controversies around Deloitte auditors backdating audit paperwork in Canada, receiving only a minor fine. They also marvel at Donald Trump's attempt to blame accountants for alleged financial statement fraud in his organization. All this, and other news including NASBA's CEO's upcoming retirement, IRS budget cut updates, and generational differences around public accounting work environments.
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Chapters
- (00:39) - Blake is back from Maryland where he gave a talk on AI and accounting
- (04:05) - CPA Journal uses bad AI to draw conclusions on AI's future in accounting
- (10:21) - Guinness Stout might not exist without taxes
- (13:33) - Jeff Bezos is moving to Miami
- (17:12) - Over 2/3 of Ohio CPAs are 50 or older
- (22:47) - Sam Bankman-Fried found guilty
- (24:19) - WeWork files for bankruptcy
- (30:17) - Trump trial updates: Donald Trump takes the stand
- (41:08) - CPA Ontario fines Deloitte
- (47:23) - IRS budget cut again
- (52:57) - NASBA CEO Ken Bishop plans to retire
- (54:25) - BDO and other firms becoming ESOPs
- (56:16) - Expensify closes their longue in SF
- (01:00:18) - We're going to QuickBooks Connect
- (01:01:06) - Blakes shares Instagram clip of street CPA interview
- (01:03:00) - Wrap up and how to earn free CPE for listening to this podcast
Show Notes
House passes Israel aid tied to IRS cuts, triggering Biden clash | Accounting Today
New York accounting firm Grassi announces ESOP | Accounting Today
Trump’s Sons Cast the Blame for Fraud on Their Company’s Accountants
NASBA CEO Ken Bishop plans to retire | Accounting Today
IG reel: Good salary BUT don’t become a CPA
Can Artificial Intelligence Become an Accounting Expert? - The CPA Journal
Deloitte Auditors Got Caught Changing Their Computer Clocks to Backdate Workpapers
Ohio floats plan to recruit more CPAs
WeWork, once valued at $47 billion, files for bankruptcy
Here's how much WeWork co-founder Adam Neumann made before the company's bankruptcy
Sam Bankman-Fried found guilty on all seven criminal fraud counts
Amazon founder Jeff Bezos is leaving Seattle for Miami
Ohio Society of CPAs Develops Action Plan Aimed at Talent Shortage
Billions still lost through bad accounting, says auditor general
Eric Trump testified over and over again he had nothing to do with his dad’s accounting. Then he was shown his own emails
Former FTX CEO found guilty of fraud
House Passes Israel Aid Bill Tied to IRS Cuts
Jeff Bezos: Leaving Seattle and Embracing Miami
Billionaire Amazon founder Jeff Bezos moves to Florida, where his parents live-and capital gains are not taxed
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Transcripts
The full transcript for this episode is available by clicking on the Transcript tab at the top of this page
Creators & Guests
What is The Accounting Podcast?
The Accounting Podcast (formerly the Cloud Accounting Podcast) is the world's #1 accounting, bookkeeping, and tax podcast! Join us weekly for a roundup of accounting news, analysis, and interviews. Plus, earn free NASBA-approved CPE credits for listening with the Earmark app. Learn more at https://earmarkcpe.com.
Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!
Blake Oliver: [00:00:04] So just to put this in perspective, SBF was once worth over $20 billion and was the number one most positive figure in the cryptocurrency industry. His company was valued at over $32 billion at its peak, and was one of the world's largest marketplaces for digital coins like Bitcoin and ether. Amazing. And you know, you said $32 billion. That was FTX was worth $32 billion and now it's worth zero.
David Leary: [00:00:33] Coming to you weekly from the OnPay Recording Studio.
Blake Oliver: [00:00:39] Hello and welcome to the show. I'm Blake Oliver.
David Leary: [00:00:42] And I'm David Leary.
Blake Oliver: [00:00:43] We are recording on a Tuesday because I was in Maryland at the Maryland Society of Accounting and Tax Professionals conference this weekend talking about artificial intelligence. And I was going to give my standard talk, high level thought leadership kind of stuff. Where is everything going to be in ten, 20 years? And I decided at the last minute to completely change it and it was fantastic.
David Leary: [00:01:09] Why did you change it? I think you did a webinar you mentioned to me earlier this week, so I did a webinar. Mind blowing stat here.
Blake Oliver: [00:01:16] I did a webinar on Wednesday with Accounting Today and Avalara, and we had close to 300 accountants on the webinar, and we did a poll and we asked how many of you have actually signed up for ChatGPT, or for Claude or for Bard and used it in any way? It was only 20%. Only 20%. 1 in 5 of the accountants on our webinar had actually tried generative AI, and that was a mind opener for me. I guess I thought it would be higher. And so I've been tailoring everything I do to assuming that people have actually used this technology, and I realized that they haven't. And so my goal in life now is just to get more people to try it, to get that number up to 80% of accountants, because I use it every day and I find it to be completely life changing. So that's what I did at the presentation on Saturday at mstp. I did maybe like ten minutes of my slides, and then I just demonstrated generative AI, how you could actually use it in your practice today. And two of my favorite examples are analyzing PDFs, court cases, analyzing the tax code, pasting some tax code into cloud or into ChatGPT, and asking it to interpret this for you to help you understand it, or providing specific cases and asking it to apply the code and see what it does, and then just drafting emails and using text to speech to talk into cloud and to draft an email. So which saves me a ton of time. I don't write my emails anymore, so it was great. I think it I think it got some people to sign up. But then I got back and I saw this. I saw this article in CPA Journal that really made me angry because it's doing the exact opposite. It's called Can Artificial Intelligence become an accounting expert? And what they did is here, I'm going to put this up on the screen here. So this is an CPA journal, which is, you know, a legitimate publication, a journal similar to the Journal of Accounting.
David Leary: [00:03:30] Like those podcasters, unlike those podcasters.
Blake Oliver: [00:03:32] Exactly. They're not they're not podcasters, right. It's a publication of the New York State Society of CPAs, and it's hard to get an article in here. It's got to get peer reviewed, all that good stuff. Right. So this is, you know, this is the profession, this is the CPA profession kind of journalism here. And so what they did was, is they got a focus group together with expertise in the areas of auditing, tax, internal auditing, risk management and forensic accounting to evaluate the responses of I to professional queries. And here's where they really screwed up. They decided to use the Google sponsored Bard system because it was more readily available to our team of professionals. Chatgpt requires an invitation. Our purpose was to assess the current state of the Bard as an example of LMS overall. So they use the worst generative AI because they.
David Leary: [00:04:21] Don't want to spend 20 bucks.
Blake Oliver: [00:04:22] Yeah, because they didn't want to spend 20 bucks properly. Right. And this is this exact this reminds me of when Accounting Today did that article where they gave it. They gave ChatGPT CPA exam questions, and they found that it could not pass the CPA exam, but they used.
David Leary: [00:04:38] The old the previous iteration. Yeah, they.
Blake Oliver: [00:04:40] Used GPT three instead of GPT four. And then they put out this article and it's like completely misleading. Why would you try to evaluate all LMS and use the worst one, the one that people joke about?
David Leary: [00:04:55] Do them all and compare them side by side, like like do the research. And I don't know who did this research, who the authors were, but I'm assuming it's a major industry. And in the same vein that your the data you have, which is pretty much nobody in the accounting industry has touched a IoT in the grand scheme of 20%.
Blake Oliver: [00:05:12] 15.
David Leary: [00:05:12] 20%. We live in a we live in a bubble. When tax, Twitter and people listen to our show and we've experimented with it, but in general, most people have not touched it. So if this person, this is their first try to try it out. You know, this is what we're going to get. I guess it's good they tried, but the people who are in our industry that are ahead on the game a little bit, you know, they're like four months ahead. They should be doing these studies and writing these articles.
Blake Oliver: [00:05:39] So anyway, disappointing. I hope that they will repeat this with Claude. I recommend Claude I for anything having to do with analyzing a PDF. You can upload a PDF to it. You can copy paste tax code into it. It accepts the largest PDF files and the most text it can handle. Really, really, really large prompts. So it's great for doing analysis. And in my presentation, one of the things that we did that kind of blew some minds was we took section 179, which is about, you know, expensing stuff like your automobile. Right. And we put the whole section 179 into Claude. And we asked it questions and it was accurate. At analyzing that and answering our questions about it. According to the group that I was with, which was I was presenting to two dozen small group setting. Two dozen tax people. So try that and then tell me what you think. Don't use Bart. Don't use the worst generative AI available. By the way, I think Google is in trouble because they have the worst generative AI, and I am quickly finding that I don't Google search anymore. I have completely switched to using Microsoft Bing Chat for all of my searching.
David Leary: [00:06:57] Wow.
Blake Oliver: [00:06:58] It's so much better than getting ten or 20 or 30 results on a page and then having to click on each page. I can just do the search in Bing and it gets me what directly what I'm asking for. And it cites multiple sources, and I can click through on each sentence of the response to get to the source if I want to double check it.
David Leary: [00:07:19] So it's like a full circle because yeah, what's great about Yahoo! Way back in the day that humans were compiling all the links and humans would view all the links, and then it would say, these are the best ones, and those would be at the top of the Yahoo searches. Yeah. So now we're like full circle, where now you're searching on Bing, you're getting a summary of the top sources, possibly summarized, but then the links to the actual sources, like it's full circle where the pendulum has swung.
Blake Oliver: [00:07:43] Yeah. And you want to see an example of that, like for instance. I just searched in Bing. And by the way, if you want to access this, I think you have to do it through the edge browser. So you download Microsoft Edge and you go to the chat option which is on the search bar. And I did a search. I said, how much debt on commercial office buildings do United States banks hold on their balance sheets? Now, do you think that if I did a Google search, I would find an SEO optimized article with that answer? No. It would be very difficult to search for that, right? Well, Bing gave me an answer. It said United States banks hold approximately 760 billion of office loans, which is roughly 35% of their commercial real estate debt. Citation. And I can click through. That's from Business Insider. According to Trepp, 80 billion of these mortgages are set to expire this year and about 400 billion will mature over the next five years. This is more than any other segment of commercial real estate. Multiple citations. So then I can click through to, you know, PitchBook, which has something here. And Business Insider and I can go verify this. Like, how great is that? That's way better than doing a Google search. And something like a huge percentage of Google's revenue still comes from search. So if they can't figure this out, they're they're done.
David Leary: [00:09:04] It is a risk.
Blake Oliver: [00:09:05] It's huge disruption. I mean they're done from the size of what they are. I mean, there's still a massive organization with Google Workplace and all these other apps and stuff, but that's a small percentage of their revenue. Their market value is trash if they can't sort this out. So anyway, one one other thing I also searched for was taxation and Guinness beer because I went on a tour when I was in Maryland of the Guinness Brewery in Baltimore. Baltimore has the only Guinness brewery in America and it's brand new. It looks fantastic. If you're ever in the Baltimore area, I highly recommend you go stop by. They've got this massive beer garden. You can do tours. I don't actually recommend the tour because we didn't actually get to see much, but I would just go there and like hang out, go to the go to the gift shop, buy some swag, you know, drink the beer. It's just beautiful. And. On our tour, which was too long and had too much information in it, though, I learned something about taxation. There's a deep connection between Guinness beer and tax, like the style of Guinness beer, which is a stout. It's because of taxes. David.
David Leary: [00:10:13] Really.
Blake Oliver: [00:10:14] Porter was first brewed in Ireland in 1776. Arthur Guinness, the founder of the Guinness brewery, did not start brewing until 1787. And he had phased out all of their types of beer from his Guinness brewery by 1799, so he was only brewing porter. But Guinness today is known for stouts. So how did they switch? Well. He switched from Porter to stout when he realized that he would pay less tax if he used unmalted and roasted barley in his beer. And that is why Guinness Stout is the is the beer that they export. The flavor.
David Leary: [00:10:53] And the beer and the Post-It exist.
Blake Oliver: [00:10:54] All over the world. And there was another there was another tax situation where. And this is why Guinness expanded beyond Ireland. So previously to let's see, it was 1777. So this was before they switched to stouts. So now we're going back to the closer to the beginning. England imposed higher taxes on Irish porters than English porters to encourage the exportation of English porter to Ireland. Very, you know, discriminatory based of what.
David Leary: [00:11:24] We're doing with electric cars and electric battery incentives with the Inflation Reduction Act. We're doing the same thing. Yeah, yeah.
Blake Oliver: [00:11:31] Or like for us. Yeah. Taxing putting high tariffs on Chinese goods. Right. Like it would go the other way though because they were exporting to Ireland. Right. But same same concept. Right. You tax you tax it less. And so then it encourages more consumption. So that was good for England right. And but then Guinness lobbied Parliament and got them to to eliminate that. So now it made sense to export Irish porter to England. So it was two tax situations that really changed the course of Guinness. It was getting rid of that tax on Irish porter. And then it was switching to stout because it was less taxes to.
David Leary: [00:12:09] So any other highlights from this trip to Baltimore?
Blake Oliver: [00:12:13] I think that was it. I didn't get to go to the Naval Academy. I wanted to do that. I'll have to do that next time. Maryland is beautiful, by the way.
David Leary: [00:12:21] I'm sure like this time of the year, leaves are changing.
Blake Oliver: [00:12:23] It was 68 degrees. Leaves were changing. We went out to the bay. It was just. It was great.
David Leary: [00:12:30] So I could kind of pivot from there for a tech story if you want.
Blake Oliver: [00:12:33] Let's do it.
David Leary: [00:12:34] And it's a follow up story to I think it was last week. We talked about how there was a study with the data. It showed that people are moving to states with less taxes.
Blake Oliver: [00:12:44] Right? Yeah, yeah, we talked about that. Yeah.
David Leary: [00:12:46] Well now we have really good data on that. So Jeff Bezos is now going to leave the state of Washington and leave Seattle for Miami.
Blake Oliver: [00:12:55] Well, isn't this just the natural life cycle of somebody who's wealthy is, you know, just.
David Leary: [00:13:01] To get to Miami? So apparently that is his original hometown, you know, and his parents.
Blake Oliver: [00:13:07] Had no.
David Leary: [00:13:07] Idea. His parents recently returned to Miami as well. And he wants to be closer to them. And then possibly, you know, Blue Origin is his little rocket ship company as they launched from Cape Canaveral or whatever. So he wants to be close to that. But coincidentally, Washington recently introduced a 7% tax on the sale of financial assets. In since 2022. He sold some $30 billion or something in front and in some crazy number in financial assets. So he's probably looking for a little bit more tax friendly place to live. Yeah. And maybe and I'm assuming his parents probably have some sort of Amazon stocks gifted to them through. You know, trust in whatever things that don't have access to, you know, rich people do. But yeah, so he's like, this is perfect proof of this. He's moving to Florida, probably because he doesn't want to pay capital gains tax. There's no capital gains in Florida.
Blake Oliver: [00:14:02] Makes sense. Well he has. He has a giant yacht too, right? Wouldn't it be easier to keep it in Florida and sail that around from there?
David Leary: [00:14:11] That's possible too. We just bought two properties too. Apparently there's a billionaires island that he bought a house there for $78 million. Yeah. So he's all in now in Miami. Plus, you know, he's been pumping out. He's buffed. Now he's got his Hollywood girlfriend, Bezos. He's living it up.
Blake Oliver: [00:14:27] Bezos inspires me. You know, like I want to I want to get fit like him in my 40s and you know like good good for him. Look look at how much value he has created. Something like an insane percentage of Americans are now Amazon Prime subscribers. And like I see these trucks going around my neighborhood all day long, like delivering packages. Oh, another crazy stat. Just random. That's sort of related. I was hanging out with my brother. He came down from New York to come to Baltimore to to meet up. We had dinner, you know, and he lives in Manhattan. Did you know that something like 2 or 3 million packages are delivered in New York City every day?
David Leary: [00:15:06] How many? 3 million?
Blake Oliver: [00:15:07] 2 or 3 million. So it's like like think about the population of a place like New York, which is I don't know what it is now like it's over ten. It's 12 million. 14 million, I think. Or maybe it's more than that, but it's basically every single person in New York getting a package like once a week, you know, or two, 1 or 2 packages every week.
David Leary: [00:15:27] I don't know, I'd probably get one once a week. You get your package delivered. Yeah, it makes sense.
Blake Oliver: [00:15:31] That's amazing. Welcome everyone who has joined us in the live stream, a reminder for our podcast listeners that you can subscribe to the accounting podcast on YouTube and you can join us live. You'll get notified when we go live. Eric says, guys, I'm a Canadian CPA looking to move to the US. My entire training is doing something called reorganizations, where we restructure organizations to take advantages related to hold companies and trusts. Is this something that exists in the US? Corporate restructuring for owner managers? If anyone in the in the chat has an answer for that, do help out. Eric. We need more CPAs here in the US. I saw a stat yesterday. That I posted on Twitter. That is just shocking. Ohio the Ohio Society did a survey of their members, and they found that of Ohio's registered CPAs, over 45% are 60 years or older. Over 45% are 60 years or older, and nearly two thirds are over the age of 50. So only one third of CPAs in Ohio are under the age of 50 years old.
David Leary: [00:16:36] They created a five point action plan to address the pipeline. Right. And number one is forming a coalition and telling the accountant story, reviewing and revising curriculum, enhancing the work experience. But the one that was interesting is in the words they chose, was what makes it interesting to me. Establishing multiple pathways. Accounting careers need to be more accessible to a broader audience, and there needs to be a change in how young professionals and untapped talent make their way into the accounting profession. Both involve removing outed or unnecessarily onerous barriers. Now they're not saying get rid of 150 or modify 150, but they're actually saying it.
Blake Oliver: [00:17:15] Yeah. Yeah, right. Without saying 150.
David Leary: [00:17:17] So is this the next state that's going to introduce legislation or announce changes? I mean, is it going to be the next one?
Blake Oliver: [00:17:24] What else are they going to do. Two thirds of CPAs are over the age of 50 in Ohio. Like that's. You know. They got to do something. It's just not competitive, I don't know. So. Like you said, the first few points of that plan sound exactly like the EPA's pipeline initiative or whatever they call it. And EPA has a committee that they've established that reported to the council in October. We have been asking EPA to provide us with somebody to talk to, to talk to our listeners to to report on what that committee has done so far. And as of yet, we have been unable to get AICPA to book anyone on this show. And the invitation still stands. If you are listening, we would love to have somebody from that committee come on the show and give an update to our listeners. Well, we're going to digital.
David Leary: [00:18:19] So there's our opportunity.
Blake Oliver: [00:18:20] Yeah, but that's not until December, you know. That's true. And so anyway, this committee.
David Leary: [00:18:24] Is going to get done. How much are they to this committee going to get done between now and December. I don't know. They're not getting anything done well. And their final is going to be the same.
Blake Oliver: [00:18:31] Their final report is not even due until council comes back in May. And then the question is like what? What are they going to be the takeaways from that. Right? I mean, it takes an entire year just to get a committee to make some recommendations. I don't think we have a year. Like if we go at that pace, right. It's going to be like when I was at a mid-sized accounting firm, and it took them eight months to turn on Microsoft Teams. For me, when that was in beta, like at that pace of change, you're never going to make anything happen in the firm, right? Same thing with with this, this talent shortage. Like if, if this takes ten years to even start making something happen, there's not going to be like it's going to be two thirds of CPAs are over the age of 70 is what's going to end up happening. You know.
David Leary: [00:19:17] And that's welcome. That's not in the plan. There's not going to let they're going to keep people alive and not let them retire. Like maybe that's the the plan I don't know, let them ever retire. Should we go back to talk about rich people?
Blake Oliver: [00:19:29] We can. I just want to thank our other live stream viewers, Mohammed said. I cannot replace accounting jobs since analyzing and presentation needs human review. I would actually agree with that statement in principle, and I have found that in my own work I has not replaced me. It has simply made me more effective, and I'm doing less of the writing kind of work, and I'm doing more of the review kind of work. So I would say in general. But but there are accounting jobs where you don't do any review, you're just prepping. And if you're just prepping and doing data entry, I think I will probably replace a lot of that. So you'll either need to learn how to use that tool or you will be out the door. And I'm thinking especially in like big corporations where there's lots of like accounts payable processing jobs, right? All those people that are like just processing invoices all day long, like I is going to be able to do that really well. Anyway, David, you wanted to get back to.
David Leary: [00:20:26] Mean we have we have we have Trump. We got Adam Neumann in from WeWork. We got Sam Bankman-Fried with Ftxs. Yes. A lot of rich dudes in the news. Okay, questionable rich dudes. Well, let's.
Blake Oliver: [00:20:38] Let's do SBF because that's an easy one, right? Sam Bankman-Fried was found guilty of a ton of stuff. I don't remember exactly how many years he could get, but I think it's over 100. He could get over 100 years in jail for the for the fraud, and I sure hope he does. Do you have any more details on that?
David Leary: [00:21:00] I mean, I just I'm amazed at the speed. It went from basically this happened a year ago. This all collapsed, right? In 12 months later, the whole thing is wrapped up like a in a perfect package. And it's done. And considering how long it takes trials and court proceedings and discovery and, you know, grand jury like how this must be is so blatant. Yeah. Like, this might have been the easiest case ever for any prosecuting attorney ever.
Blake Oliver: [00:21:31] To your point, the jury only deliberated for four hours. It was a month long trial, and the jury went in for half a day and found him guilty of seven counts. So just to put this in perspective, SBF was once worth over $20 billion and was the number one most positive figure in the cryptocurrency industry. His company was valued at over 32 billion at its peak, and was one of the world's largest marketplaces for digital coins like Bitcoin and ether.
David Leary: [00:21:59] And, you know, you said $32 billion.
Blake Oliver: [00:22:02] That was ftxs was worth $32 billion, and now it's worth.
David Leary: [00:22:06] Zero and now it's worthless. I think we can top that.
Blake Oliver: [00:22:11] Yeah, well, we.
David Leary: [00:22:12] Work, we work, we work. Went bankrupt. They were at one time in 2019, valued at 47 billion.
Blake Oliver: [00:22:19] You know, we were we were calling out. We work a long time ago. I don't remember how.
David Leary: [00:22:25] I remember I specifically remember being at Zero Con in San Diego. And, you know, they bring in the press and, and, and analyst and this guy, I don't know if he worked for zero or if he was an analyst and then but he, you know, the analyst, they analyze lots of companies and it's not one focused on. And we got into a discussion at dinner about we work. And I was under the stance of like it's like a bubble because but my my opinion was it's very disruptable. There was nothing special about it. Like, like what if Starbucks offered like, hey, we're going to put in monitors on some of the tables in Starbucks? It's a WeWork now, essentially. Right? It's very in. Starbucks offered a membership to where you had to pay extra to get faster internet or something. I don't know, it's very disruptive. So I've always been like, short on WeWork since day one, not from an investor. I don't have any. No real. Just an opinion short. Yes. And so it's completely happened. They've completely declared bankruptcy this Monday in chapter 11 and in new Jersey federal court.
Blake Oliver: [00:23:24] Well, so remember when we talked about this, I said, here's the problem with their business model. They say these long term leases for entire floors or entire buildings, and then they turn those into short term leases, where as long as they have those short term leases, they're making good money because they can charge $500 for a little tiny square. But if they have any problems with occupancy. They're stuck in these long term leases. So any recession, you know, any COVID, anything like that. This was I think we were talking about this before the pandemic, right.
David Leary: [00:24:01] Yeah. You talked about this a lot in the past, and it happened.
Blake Oliver: [00:24:03] We were right.
David Leary: [00:24:05] Yes. Yeah. Again. Again. You're right about you're about the crypto as well.
Blake Oliver: [00:24:09] Maybe I want to go back and find a clip.
David Leary: [00:24:13] Anyway, so Weaveworks had this dramatic rise and fall to where they were about to IPO. They think they had a crazy valuation. They wanted to IPO at $43 billion. And and now they've completely pulled back. They're not going to IPO.
Blake Oliver: [00:24:27] Capitalist free market system relies on financial statements. And they worked in this case right. People realized that you cannot run a real estate company with operating expenses twice your revenue, and go public and expect people to invest money at this insane valuation. So. We're not right that often, David. So I feel like we should celebrate our our presence. Yeah.
David Leary: [00:24:51] So they so they have 777 locations around the world. In millions of square footage.
Blake Oliver: [00:24:57] Yeah. So what's going to happen to all that square footage releases?
David Leary: [00:25:00] And essentially they currently they have a reported liabilities ranging between 10 billion to 50 billion. Don't know why it's a range like does somebody not know how much they actually owe at this point I thought that was kind of strange. Um, and the CEO and co-founder Adam. Is it Newman?
Blake Oliver: [00:25:19] Newman.
David Leary: [00:25:20] Newman. Adam Newman. He said it was disappointing that this occurred. He said it's been a challenging for him to watch on the sidelines since 2019, as we worked, has failed to take advantage of a product that is more relevant today than ever before.
Blake Oliver: [00:25:33] That guy is delusional and he he enriched himself too, at the expense of his shareholders with all the self-dealing. Yeah. It's incredible.
David Leary: [00:25:42] And then I'll talk. I'll have some of those numbers. And he said, I believe that with the right strategy and team, a reorganization will enable WeWork to emerge successfully. Now, I've seen this where founders come back and rebuy the company after it's bankrupt.
Blake Oliver: [00:25:54] He could totally do.
David Leary: [00:25:55] He might have he could have some plan to do that but have some of the money. How he. So when he stepped down from the CEO in September of 2019, this is when the whole going public thing completely the wheels fell off the ship. That was right after that. Zero because that's what everybody's talking about. Them going public right around. Then he basically from SoftBank paid him for his shares, his remaining stake $480 million negotiated down from what was supposed to be $1 billion he was supposed to get. But then he filed a lawsuit. So he still got another 185 when he agreed to do a non-compete agreement. And they got another 106 million as part of the settlement. So basically, he walked out just just in the Spac process. He walked out with $770 million of cash.
Blake Oliver: [00:26:43] And he's a billionaire now, right?
David Leary: [00:26:45] Like and apparently he's had about another 722 million value of WeWork in 2021. But in theory, all that's value is zero now. But he's a billionaire. Yes. Yeah.
Blake Oliver: [00:26:57] So he extracted $1 billion as we work went up and then it collapsed. Sbf should have learned something from Adam Neumann. Right.
David Leary: [00:27:06] The entertaining part of this story to me is you have an Israeli that because SoftBank is all the Saudis money.
Blake Oliver: [00:27:15] Through Japan though right?
David Leary: [00:27:17] Softbank is through through SoftBank in Japan. Right. It's the it's the Saudi royal family. And so to me I see a story of like here here's an Israeli figure out how to take money from the Saudi royal family and bring it back to Israel.
Blake Oliver: [00:27:28] Man I never even thought of that. That's even more devious. Wow.
David Leary: [00:27:33] Yeah.
Blake Oliver: [00:27:33] So he should watch his back. Well, we know what happens to people who piss off the Saudis.
David Leary: [00:27:39] But then, you know, he has his new thing. That coin he's selling, it's called is it flow or something like float? And then it's tied to he's basically building WeWork apartments now. And he got a $300 million investment that that that company is now valued at $1 billion. Like he's doing the whole thing over again. This is genius. Oh my gosh. These these guys are he's like a cult leader. More of a genius because he's not going to jail. Exactly.
Blake Oliver: [00:28:04] Exactly. Yeah.
David Leary: [00:28:05] All right. Any other rich guys in stories you have?
Blake Oliver: [00:28:07] Well, I mean, we got the Trump trial updates. So the last time we talked about it, it was his accountant on the stand. And it was his CFO on the stand. Now it was the Trumps themselves. Took the stand Eric Trump Trump Jr and Trump senior all on the stand. Trump senior just yesterday on Monday November 6th. So I'm trying to read through this testimony and summarize it for you.
David Leary: [00:28:34] Well, the headlines like, it's funny because some of the headlines were like blame accountants, it's the accountants fault. And that's what kind of.
Blake Oliver: [00:28:39] Yeah, that's the one.
David Leary: [00:28:40] A lot of that verbiage.
Blake Oliver: [00:28:41] Yeah. That's the one that caught my attention. Trump's sons cast the blame for fraud on their company's accountants. That was the New York Times headline. And I think that's actually I mean, fairly accurate. There's a really good quote from. Trump Jr. Asked whether he knew anything about the industry standard, generally accepted accounting principles beyond what he had learned in college. Mr. Trump Jr said, no, that's what I have CPAs for. He added these people had an incredibly intimate knowledge and I relied on them. Asked whether he worked on one of the statements of financial condition from 2017, Mr. Trump was clear. Quote, I did not. The accountants worked on it. That's what we pay them for. Eric Trump said when he was presented with internal Trump Organization communications in which he discussed the value of certain key assets. Quote, I didn't know anything about it until this case came to fruition. Here's here's Donald Trump again.
David Leary: [00:29:39] Makes sense. Right? He's never looked at it. He's never paid attention. And then from the court this this comes to court or becomes a case. And now he's asking about these financials. He's probably truly never looked at I believe that.
Blake Oliver: [00:29:50] Well I mean. That's irresponsible. I just find it hard to believe that, like, the two guys running the organization didn't. Weren't.
David Leary: [00:30:00] Yeah, they were more the day to day guys.
Blake Oliver: [00:30:02] They were. So Trump Jr said he testified that he had no recollection of how the asset valuations used in the financial statements were prepared by the company's accountants at Mazars USA LLP, despite documents displayed at trial showing he personally signed off on them. Quote, I relied upon Mazars and our accounting team to tell me that's why we have accountants. But earlier in the trial, Mazars accountant, Donald Bender, testified he relied on the Trump Organization to provide accurate valuation data and that he wouldn't have signed off on the financial statements if he had known they were inflated. Bender said under the terms of the contract with Trump, Mazars wasn't required to verify the appraisals, which is true and is something that none of these articles dug into. The fact, as we have reported on this show, David, that Mazars was engaged to do a compilation. And in a compilation you do not verify the numbers. You don't check the valuations. You're just taking the information provided to you by the client and you're presenting them in the correct format.
David Leary: [00:31:04] Shouldn't it be coming up with a statement and defending and explaining that, like in getting into the news cycle here?
Blake Oliver: [00:31:14] That's a fun idea, David. I think we should pitch that to their PR team. I think, I think, I think everybody wants to stay out of the news when it comes to this issue.
David Leary: [00:31:24] If it's like, oh, look, the EPA is defending me. Now I'm going to pay my membership dues. I don't.
Blake Oliver: [00:31:29] Think that. I don't think accounting firms should be doing this kind of engagement. I think this is this is this is like something that is total bullshit. It confuses the public. Nobody understands.
David Leary: [00:31:38] They it's very similar to the association reports for the crypto companies. Yeah.
Blake Oliver: [00:31:43] If somebody wants to make financial statements like we don't need compilation engagements anymore because anyone can go use accounting software to make financial statements like the Trump.
David Leary: [00:31:53] Good use case, I could do these things.
Blake Oliver: [00:31:55] This is this to me is very similar to those, you know, like a compilation done poorly is just as useless as a what are those crypto companies getting the attestation? Yeah, because they provide no assurance. But they mislead people because the accounting firms logo is on the, you know.
David Leary: [00:32:15] Exploit the brand. Yeah, exactly.
Blake Oliver: [00:32:17] So it creates no value. So it's unethical, I think, to even do this sort of engagement if you ask me. Because what's going to happen to those financial statements. They're going to get used by banks.
David Leary: [00:32:28] You want to touch on. I can touch on the 80 billion IRS funds and how it's been whittled down to now almost in half with the latest actions.
Blake Oliver: [00:32:36] Well, I want to get to that. But we didn't talk about Trump's actual testimony yet. Right. He was on the.
David Leary: [00:32:41] Sorry, sorry, sorry.
Blake Oliver: [00:32:42] He was on the stand yesterday. No, no no worries. So apparently it was a very contentious and like I don't know, I mean just I'm just trying to think like, why would you want to piss off the judge, you know, by like basically calling the whole thing a sham and a fraud, like, like you're literally in you're in court, there's no jury. It's just a judge sitting there and you're literally saying, like, this is a witch hunt.
David Leary: [00:33:03] And he's always campaigning. He's always campaigning. That's his thing.
Blake Oliver: [00:33:07] I know, but like to, you know, it's one thing to do it on social media outside of court, right? It's another thing to do it to the judge's face like, I don't, I don't understand. I guess he doesn't care if he loses, I don't know. So, you know, the prosecutors are trying to pin down. Trump and his sons, the Trump family, for the inaccuracies or the, you know, the inflated valuations. And Trump said, actually something very intelligent. He did something that I liked on the stand, which is he said when asked about the the valuations and the, you know, the inflated valuations, as the prosecutors are alleging, the question from the state attorney, Kevin Wallace, was, did you ever think that the values were off in your statement of financial condition? And Trump said, yes, on occasion, both high and low. Which is smart, right? Because this is this is where the the leeway is in all of this is valuation is extremely subjective. What is the value of. That building on 51st Street in New York City. It's whatever a willing buyer is willing to pay for it. So you don't know what the value is until you put it on the market and you sell it. So valuing something that's not on the market. Especially something that is very unique is extremely difficult, and you can come up with extremely wide variations in value. And that's the defense. I think that would work the best for Trump is basically to say like, well, and he said this on the stand, to paraphrase like, I'm a real estate expert, I know what these values are better than the appraisers. So who's to say that he can't say that a property is worth this and put it on the balance sheet and give that to a bank?
David Leary: [00:34:48] And this is where I still wonder what the crime is, because let's go back to and I'm sure millions of people do this. You're filling out your you're getting a credit card for the first time. You kind of oh they ask.
Blake Oliver: [00:35:02] You what's your what's your income.
David Leary: [00:35:03] Your income. And you put a little bit more. Everybody does it right. It's the exact same thing. It's the exact like it's the exact same crime. And so I just don't it just feels like there are a lot of people are getting their hopes up like, oh, they got him this time. Yeah, I don't think I don't know if there's a crime there. I don't think like that's that's in the end. I don't know if there's a crime.
Blake Oliver: [00:35:22] So put this in contrast with our fraud case. Open. Shut. Right. This is on the opposite end of the spectrum in my opinion. I don't care what you think about Donald Trump, if you think he's a horrible person or if you think he's the Lord and Savior. Okay, this is just looking at the facts. I think it's going to be challenging for Letitia James to win this case, even though the judge has already ruled there was fraud. The question is how much? That's what's going to determine the fines in on appeal. I could see a lot of this just getting thrown completely out.
David Leary: [00:35:58] So it's it's just like when you go to get your house appraised, you have a guy come in, you don't like the appraisal you did, you go hire a different guy. You use that appraisal when you. It's kind of the same. The same game here. Yeah. You get the person to give you the number you want.
Blake Oliver: [00:36:12] Exactly. Yeah. That's right. And it's hard for anyone to say no. That number is wrong because everybody has an opinion, and you can always find somebody who will sell you a better opinion or the opinion you want. Yeah. I mean, that's the problem with audit, right? It's like if you don't like what your auditor says, you can just go find another auditor. Most of the time there's enough auditors out there looking for work and are willing to lowball on fees and, you know, skimp on the due diligence. Same thing with these banks, too. Like the reason that the banks didn't do the due diligence is because they really wanted the deals, because they could make a lot of money. And bankers are incentivized to to make deals. And I don't think that. The person who makes the deal with Trump is not going to be personally held accountable. If something goes sour, like ten years later or six years later, they might not even work for that bank anymore. So they don't have an incentive to do the due diligence. They just have to get it past the risk management team.
David Leary: [00:37:12] Like because that person, the broker or whatever, basically the sales guy based on the loan. The sales guy. Yeah. Like he has to worry about it. If he never pays the loan back, that's a whole different division. Exactly.
Blake Oliver: [00:37:23] It's just it's just. So they're all doing the they're all doing this game. It's all this dance. Right? Same thing that happened in the mortgage crisis. Like same kind of stuff where it's the system is set up to reward unethical behavior. And so everybody does it. Not everybody. Some people don't. But those people don't win because they don't bend the rules.
David Leary: [00:37:42] Speaking of being rewarded for unethical behavior, did you see what happened when Ontario fined Deloitte and why they find them?
Blake Oliver: [00:37:51] I love this story, David. Tell us. Tell us about how the Deloitte auditors in Canada backdated work papers.
David Leary: [00:37:59] Apparently their software to do the audit work audits Deloitte's internal audit software, and it has a date and time it captures from your computer date and time. And they figured out if they changed the date and time of their computer to older dates. They can make the work papers have whatever date they want.
Blake Oliver: [00:38:15] So originally. You could just change. You could. You could make the sign off date on a work paper, whatever you wanted. But that was apparently a problem. So they changed it so that you couldn't do that anymore. But you could get around it by just changing your computer clock in the settings.
David Leary: [00:38:35] And and so over this during this time period between November of 2016 and May of 2018, over 930 audit working papers were backdated for at least 39 different audit engagements. But that's actually like, okay, this should piss people off and upset people. But really, when I read this, what was most upsetting is the ridiculous, fine, they had to pay. So Deloitte's revenue for 2023, I don't know if we talked about on the show or not, $65 billion. The fine for this action 1.59 million.
Blake Oliver: [00:39:10] 1.59 million.
David Leary: [00:39:12] Let's put this in numbers that maybe listeners can understand. So for somebody that assuming my math is correct, I'm not going to claim correct math on the show, but someone making about $100,000 in income, it would be like finding them $2.46.
Blake Oliver: [00:39:29] Okay, so they're global. What was their revenue?
David Leary: [00:39:32] $65 billion. Globally. Globally.
Blake Oliver: [00:39:34] Deloitte. Deloitte. Okay. Do you know what Canada. Because they're all under Deloitte. Right. But they're all separate firms. This is the thing that's interesting about large accounting firms is they're all separate entities that share the same brand and a governance structure. But like so what do you know what it is for CPA Canada or for Deloitte Canada.
David Leary: [00:39:53] For Deloitte Ontario? Guess it would be or something I don't know okay. It doesn't matter. They probably have billions. I'm going to say it's a joke. It is a complete joke of a fine. Right?
Blake Oliver: [00:40:03] No I get it right. So so yeah. Because if you take 65 billion and the portion of like 1 million. Yeah, it's like tiny, tiny, tiny, tiny little. Fine. Let's see. Deloitte Canada Bing is telling me that it was like 4 billion. Looks like 4 billion about. So yeah, if you find somebody like a million and they have 4 billion of revenue.
David Leary: [00:40:28] And it's just.
Blake Oliver: [00:40:30] But okay. So it's so the fine is this is and this is something we see all the time is that the fines are a little hand slaps. Sounds like a lot of money, but it's not. So they keep doing it.
David Leary: [00:40:41] Because. So our governing boards of our industry. Right. This is Ontario. We have the pcob these fines for audit mistakes and audit fraud. Arguably this is fraud, right? There's no fines for it. Like like we just allow accountants to commit fraud when they're the ones supposed to be fighting the frauds. Like this is crazy.
Blake Oliver: [00:41:03] You wonder why we have trouble attracting young people into a profession where unethical behavior is systematically incentivized. And studies show I actually have an article here about how Gen Z's really, really want to work for companies that are big on environmental, social, and governance stuff. They want to work for companies that make the world a better place. And here you go into like a staff auditor role at Deloitte in Canada. And. You encounter a system where you're cheating regularly and your job is supposed to be to hold other companies accountable.
David Leary: [00:41:40] And arguably the profession that in theory should have the most ethical in theory is supposed to be the most ethical profession. Oh, we.
Blake Oliver: [00:41:48] Talk about it all the time. We talk about marketing, we talk about a big game. We're the trusted advisor. You know, we we are the guardians of the financial markets. Everybody without audits. How would anyone know to trust the numbers? It's shameful. And I just want to call out that number. You said 930 audit working papers were backdated in at least 39 audit engagements. Now why do you backdate? You backdate because you didn't do the homework. You issued the audit opinion because you needed to get it done on time, and then you go back and you make up the homework later.
David Leary: [00:42:28] All. Thank you for explaining it that way. It's even worse. It actually. Yeah.
Blake Oliver: [00:42:32] And usually you don't do it until.
David Leary: [00:42:34] You got it. Yeah. And arguably these are fake audits because they actually do the work. Yeah. Until after the fact.
Blake Oliver: [00:42:40] I would argue that many audits are fake audits that like the audit opinion, is already bought and sold and purchased by the client, and then it's the job of the auditor to go and make it look like they did the, the work.
David Leary: [00:42:53] So, so so basically our conclusion here of these couple stories is there's nothing there's nothing different between an audit and an appraisal.
Blake Oliver: [00:43:01] Well if you hire it depends who you hire. If you hire an unethical appraiser, they'll just give you the number you want. And if you hire an unethical auditor, you will get the audit opinion you want. And there's not really a effective system to stop the unethical auditors and appraisers. And I just want to make it clear that I'm not saying that all auditors are unethical. There are many, many ethical auditors, and there are many, many ethical appraisers. But when you have a system where the unethical people thrive and no.
David Leary: [00:43:32] Penalty, there's no penalty.
Blake Oliver: [00:43:34] Well, yeah, the penalty as as Daniel said in the chat, tis a flesh wound. It's true. So what are they going to do? Are they going to stop doing this now? No. Because it'll cost them money. They're going to keep doing it. Maybe not this specific thing, but it'll be something else, right? The cheating will continue. Okay. The one we didn't cover yet was the IRS budget getting cut.
David Leary: [00:44:01] Yeah. So, you know, it's less than a year ago, right? When was the the Inflation Reduction Act passed?
Blake Oliver: [00:44:08] Oh, God. Don't quiz me on this. But so that that act contained the extra $80 billion for the IRS over ten years, and we had all the headlines, about 27,000 armed IRS agents. That was a fun. That was a fun time.
David Leary: [00:44:24] So then somehow, like 1.4 billion was stripped out of it. Then they renegotiated it another 10 billion for 2024, another 10 billion taken out of it for 2025. And now the latest thing to pass the house is they're stripping another 14.3 billion away, and they've tied it into military assistance for Israel.
Blake Oliver: [00:44:46] I don't think this is a good strategy. Sorry.
David Leary: [00:44:49] And this is the first this is the first proposal from the Republicans with the new House speaker, Mike Johnson. And it already passed. The House passed the aid package to 26 to 1996 on Thursday.
Blake Oliver: [00:45:00] And Biden said he's going to veto it. Well, he's not going to have to veto because it won't get through the Senate.
Speaker3: [00:45:05] Yeah.
Blake Oliver: [00:45:06] But well okay. So my gut is saying this is not like a great strategy for Republicans because like the I understand there's a big chunk of the Republican base that is anti-war these days. And that was Trump who did that. But there's also a big chunk of the Republican Party that is like. Hawkish still. So you're splitting your party again by doing this? Yeah. By holding up military aid, especially for Israel, like Ukraine. I could see them doing that and being successful in Ukraine because Americans care less about that. I think polls show that like they're less engaged in that. But like Israel, I was looking at polls on this and like there's really strong support for Israel in America, still very strong. And it was like two thirds. I don't remember the exact question. I don't want to say it, but it's like very high. So it's like, why would you go why would you tie cutting funding to Gaza military support? Republicans in Congress are really screwing up, if you ask me.
David Leary: [00:46:14] So within 12 months or so, give and take a few months, that 80 billion is now 44.3 billion. And this is just within a year like what happened? Are they going to every little piece of legislation is going to keep having some provision in it to cut the funding away like this is zero.
Blake Oliver: [00:46:29] And let's think about this like the strategy of cutting funding to the IRS. Is that really a great strategy as well? Like I understand there's a part of the base that thinks there should be no IRS. And so it's a popular thing to defund the IRS. Right. But also you defund the like the IRS is is like hobbling along, like barely functioning. And at a certain point there's a cost to that.
David Leary: [00:46:54] They actually have a number. So the Congressional Budget Office forecast this would cost the federal government $27 billion in revenue due to tax cheaters.
Blake Oliver: [00:47:04] Mitt Romney. There's a quote from Mitt Romney recently on this that I think summarizes the traditional Republican Party view on this. He said, too often over the last decade, the IRS has been used for political means. This legislation will prevent the IRS from targeting Americans because of their presumed political religion. That's not it. I used AI to search for the quote and I didn't. It failed. It failed. See, it takes human. You still need humans. I couldn't do this podcast anyway. There was a quote from Mitt Romney I wish I had it, but he basically says like something like, you know, generally if you cut funding for the IRS, you don't increase tax revenues or something like that, you know? It's like, not a good idea.
David Leary: [00:47:50] I don't know. This whole episode is just a bunch of head shakes. Are those of you that are not watching the video? Yes. I've been shaking my head just back and forth a lot in this episode.
Blake Oliver: [00:48:00] Here's a something else going on in the world is Nasba CEO Ken Bishop plans to retire. As reported by Accounting Today.
David Leary: [00:48:08] I saw that I was going to text you. I said, Blake, there's a job opening if you'd like to pursue.
Blake Oliver: [00:48:14] Um. Well. Maybe I'll put my hat in the ring. Does somebody want to nominate me? There is going to be a selection advisory committee representing NASA's eight regions. The committee is seeking a visionary leader with strong financial and business acumen, executive decision making abilities, dynamic public speaking skills, and an understanding of the accounting profession and its regulation.
David Leary: [00:48:35] You got to make a pitch video, put it up in your LinkedIn and we'll share it around on social media, like like a political campaign.
Blake Oliver: [00:48:42] Well, I would say I don't know if I would, I would I'm not sure this is a job.
David Leary: [00:48:47] A million bucks, Blake. It pays a million bucks a year.
Blake Oliver: [00:48:50] Yeah, that's the crazy part. People don't realize this. So NASA's Ken Bishop, is that. What did they say the next person is going to get that made over $1 million a year running Nasba. And Barry Melanson makes like over $2 million a year, I believe, running a CPA. It's a lot of money. And the crazy thing people don't realize too is like Ken Bishop wasn't even a CPA. He had a career in law enforcement. A lot of the people running the associations are not CPAs. I always wonder why that is.
David Leary: [00:49:21] Maybe I should run. Maybe I should try to be a president. Maybe it's a better idea. Yeah.
Blake Oliver: [00:49:26] Here are some other follow up. Bdo became an employee stock ownership company. They formed an ESOP.
David Leary: [00:49:35] Yeah.
Blake Oliver: [00:49:36] That was a big deal. We had a great interview with Wayne Burson, CEO of BDO, on the show. Go listen to that episode. You'll understand the rationale. I think eventually every accounting firm will be employee owned and the partner model will slowly die away. New York accounting firm Grassi announced an Esop, their top 100 firm based in New York, and they are doing the alternative practice structure where you take the audit, which still has to be in many states, a partnership structure, and you just carve that out into its own entity, and then you put everything else into a corporate entity that is the Esop. You create the employee ownership and the trust or whatever, and then you lease employees to the audit firm. It's basically just a workaround to get around the the rules around audit firms. Yeah. So I think we're going to see more and more of these top 100 firms do this, because how else do you attract talent, you know, that doesn't want to stick around for 10 to 15 years to become partner? And like we saw, there's this really desperate for talent like in Ohio, two thirds of accountants over the age of 50. 45% over the age of 60. Nuts.
David Leary: [00:50:46] Yeah. The employee, in a way, the employees are. That are going into recounting the new hires that it's not so much they can negotiate. It's just they have so much more choice and they're going to pick the better value. Yeah. And and it's a hard argument not to say if you're going to go work for a top ten firm, not to go to work for now, because you're guaranteed two and a half years in. If everything burns out and you just quit accounting, you're going to have a little something to show for it. At least if you go to BDO, you.
Blake Oliver: [00:51:14] Got some equity with the other firms. Yeah, yeah.
David Leary: [00:51:17] Teeny bit to show.
Blake Oliver: [00:51:19] Expensify closed their Expensify lounge. David.
David Leary: [00:51:23] Really? Yeah.
Blake Oliver: [00:51:24] Remember? No. Remember six months ago, Expensify set up this really beautiful bar in their San Francisco headquarters, and they said anybody who's like, an expensify accounting partner, employees can go there and just, like, drink for free and hang out and have a great time. And it looked beautiful. And they actually brought like a recreation of it to one of the conferences we went to last year. Yeah. Like was it digital where they scaled version?
David Leary: [00:51:47] It was at QuickBooks connect. Quickbooks connect. They built an identical replica of their bar and they brought it to a conference.
Blake Oliver: [00:51:52] Well, six months later, it's shutting down. It's closing. Oh, it already closed on November 1st. And there was an article featuring David Barrett, Expensify CEO in fortune, saying that the push for employees to return the office is a losing battle, even with free drinks as an incentive. They could not get people to come into San Francisco to go to the office. And Barrett says that companies insisting on a return to the office should reconsider, as the concept of work from anywhere has become the new norm. He believes that no amount of coercion will work in the long run, and that businesses insisting on a return to the office are fighting a losing war. However, he also noted that the lounge experiment provided other benefits, such as testing new products and impressing potential clients.
David Leary: [00:52:37] So speaking of Expensify, I don't even have the article because it got lost in the shuffle from 2 or 3 weeks ago, but Expensify announced so they have the new Expensify app. They are now going to let you do personal expense reports in there. So if that's the best way to explain it. So you and I, Blake, we go.
Speaker3: [00:52:55] Well they even as.
Blake Oliver: [00:52:56] They really get rid of it, they get rid of the expense report concept. It's just send money back and forth.
David Leary: [00:53:01] Exactly right. We can split a bill. So let's, let's we can use Expensify and we're going to go have a meal. That's not a business expense. Yeah. Now we can split the cost on that. You can pay me. We can send money back and forth. And the argument is, well, if you already have this expense app on your phone, why go get another app to pay the other people at the table? You can split it through that. It's don't. Some part of me though. My brain like I don't know if I want like we go out of our way as accountants so much to tell people separate your business and your personal finances. So, so over here we finally got people to use a bank like relay to get a business checking account and use that for their business. Yeah. And then over here now you're like, oh, by the way, here's this expense app and you can use it for your personal stuff too. I don't know, it seems it's it mixes the message, I think, to clients. And at the end of the day, even myself, I don't want my personal stuff. I feel like that's noise in the way of my business stuff. Yeah.
Speaker3: [00:54:01] I don't know. What's your take?
David Leary: [00:54:04] What's your take on a personal app like that?
Blake Oliver: [00:54:07] My take on a personal app. Well, I mean, it all goes back to like Expensive Eyes vision, which we've talked about before. I want to be like like Venmo essentially, or like handle all money movement around the world. And it's so like you have to do the personal stuff if you want to do that.
David Leary: [00:54:24] So I'm thinking like, you know, I'm using Venmo. You know, kids are in sports at school and there's parent groups and you're sending money back and forth through Venmo all the time and then have. I may say mess, but, you know, we have a mess. You know, of using expensive fire. We got all these things like send me things to approve. I'm sending things to Blake to approve. All I need is that all to be in the same feed? Yeah.
Blake Oliver: [00:54:44] Guess I could see that being an issue.
Blake Oliver: [00:54:47] All of these apps are actually not that complicated. It's all the execution. It's like, what is the user experience? That's why Expensify one with expense reports like years ago. And we're just going to see if that works again for the new version. Can they do it twice?
David Leary: [00:55:03] Erskine. Yeah. There's got to be an easy way of you just in my brain. I'm like, I don't want the mess, but expensive. I could figure out a way to make it so it doesn't feel like a mess.
Blake Oliver: [00:55:12] But maybe they can. We'll find.
David Leary: [00:55:14] Out. An announcement by them.
Blake Oliver: [00:55:15] I've got a video to close out. If you don't mind, David, I think this would be fun.
David Leary: [00:55:20] Before you play the video, though, I want to make sure I don't forget to tell everybody we'll be at QuickBooks Connect on Sunday. And Sunday night you can come see us. We are going to be at the ignition Pre-con party at QuickBooks connect 2023. It is Sunday, November 12th, 7 p.m. Pacific Time. It's at the Alexis Alexa's Las Vegas. I think that's inside Paris.
Blake Oliver: [00:55:42] I think you're right.
David Leary: [00:55:42] Right. It's right on the street. It's right out there on the strip. The two X's patio bar with two X's in the show notes. So if you open up your show notes, there's a link you can register. It's a free event. Come in and say hi to us in person. You know, it's just like the live stream, but it'll be in person. We'll have drinks and it celebrate the QuickBooks community.
Blake Oliver: [00:55:59] That's awesome. Geek says see us Sunday. We will see you there. That's great. Awesome. Thanks everyone who joined us. Really appreciate you coming in on the live stream. I've got an Instagram reel that I want to finish things out with. This just popped up in my feed and I was really excited to see an accountant talking about being a CPA and how much money they make. I think you'll like this too, but. But then there's a surprise at the end, David. So stay stick to the end of this. You'll see what I mean. So the question is how much do you make as a CPA?
Man on the Street Interview: [00:56:30] How's it going, man? What's your name? My name is Michael Michael I'm Charles. Nice to meet you. My pleasure to meet you, brother. What do you do for a living? I'm a CPA. Cpa? How many years? About three. That's awesome man. How much do you make as a CPA?
Man on the Street Interview: [00:56:39] I'd say all in salary bonus. Buck 20, buck 30.
Man on the Street Interview: [00:56:42] That's awesome. Only three years in. That's amazing. Man. What would you say was the number one barrier to reaching your level of success?
Man on the Street Interview: [00:56:48] Finding good people to work for? Man, it's a tough industry. Accounting is tough. Yeah. So you got to find the right people to work with, man.
Man on the Street Interview: [00:56:53] Who besides yourself, has played a major part in your success? My best.
Man on the Street Interview: [00:56:56] Friends. You got to surround yourself with top notch people, man. You can't be around clowns. Simple, but sure. But that's straight up.
Man on the Street Interview: [00:57:02] That's real. Last question for you, brother. What advice would you give to people looking to get into being a CPA? Don't become a.
Man on the Street Interview: [00:57:07] Cpa like.
Man on the Street Interview: [00:57:08] That. Trade. I appreciate your time. Oh yeah man that's.
Man on the Street Interview: [00:57:11] Awesome seeing you guys.
Man on the Street Interview: [00:57:12] Paid. Oh yeah. Appreciate you my man. How much do you make.
Blake Oliver: [00:57:15] After-
David Leary: [00:57:16] Don't become a CPA.
Blake Oliver: [00:57:17] After that great video. He's talking about great tips. He talks about his salary. He talks about tips for being successful. And then the point of advice is don't become a CPA. That is from Charles Junior Walker on Instagram and. Can I see how many views it has? Why can't I see?
David Leary: [00:57:37] I've seen another video similar to that, where it's in New York City, around Central Park and randomly interviewing people, and a guy is walking and I think he's half exercising. He's got his EarPods in, you know, he's doing a little exercise, and the guy didn't even stop for the interview, like, what do you do? Like and they asked him, like, if you enjoy life. He said, no, I hate it. And you just kept walking. I can't even do the I saw.
Blake Oliver: [00:57:58] That one too. Yeah, this is a problem.
David Leary: [00:58:01] Just kept going.
Blake Oliver: [00:58:02] All right. Well, I got so much more. I wish we could. I could go for another hour, David, but we'll have to save it for next time. Thanks everyone for joining us. Hope you are having a great week so far. And do subscribe to us on YouTube. And don't forget you can earn continuing professional education to renew your CPA license, maybe to reactivate your CPA license. If you're a CMA, it works as well. We also have enrolled agents. They use the earmark app and they get CPE for listening to this show. And many others such as oh my fraud, federal tax updates, the unofficial QuickBooks accountants podcast. You can get your entire CPA requirement done, probably except for that state specific ethics course on earmark, and you can do it for free every single week. And if you want to support us, you can subscribe and get unlimited access. So do download the earmark app on iOS or on Android, search and earmark or go to earmark Cpcomm and you'll find us. And David, we just got the trademark on earmark. I'm very happy with exciting.
David Leary: [00:59:04] Yeah. And based on the data this week, court course completions are really skyrocketing because everybody has to get all their courses done before the end of the year. So it's CPE season. That's an easy way to to get them. And here's the best part. And I pitched this as a joke to Blake yesterday. But like we could have our own on site conference where you get to pick any place in the world to travel, and you could use earmark app to get CPE. You can go anywhere you want. You don't have to come to one location for a conference to get your CPE. You can build your own vacation. We'll have a.
Blake Oliver: [00:59:35] So it's like a virtual conference, but the attendees travel somewhere.
David Leary: [00:59:40] Yes.
Blake Oliver: [00:59:41] And then they join the virtual conference from wherever they're at.
David Leary: [00:59:45] I wonder they don't even have to attend anything. They just use the app and get.
Blake Oliver: [00:59:50] So my question to our listeners is, if we did something like that, could our listeners or attendees to the conference get a tax deduction still? Because that's one of the big reasons that people go to these all day long. Cpe is in, you know, there's one coming up at the Four Seasons in Orlando that people are going to. So this is a gimmick.
David Leary: [01:00:10] It's what you're telling me. It's a tax deduction gimmick.
Blake Oliver: [01:00:13] Well, maybe this is the theme of our episode, but I feel like a lot of the stuff we talked about is, you know. Yeah, exactly. I mean, you got to get your CPE. Why not get a write off? You know, why not take it as a business expense and take your family to Disney World at the same time, right. That's what's happening here, obviously. And the firm pays for it.
David Leary: [01:00:34] We could geofence the app where it only works at certain locations to prove that they were there.
Blake Oliver: [01:00:39] Yeah, that's the question. The question is, how do we get people to how do we get people to benefit of taking a trip and earmark?
David Leary: [01:00:45] We have to solve this.
Blake Oliver: [01:00:47] We'll figure it out. You know, we figured it will help us. Our listeners helped us. It was our listeners who inspired us to create earmarks so they could earn CPE for listening to podcasts. So now we just have to figure out with our listeners who are experts, we're not tax experts. Our listeners will tell us, how do we get the deduction for the travel for our listeners as well?
David Leary: [01:01:08] Well, buying earmark, if you pay for the unlimited 130 bucks is 100% deductible. It's a business expense, right?
Blake Oliver: [01:01:16] It should be. Yeah. Just like any other product, if you ask me. I'm not a tax advisor. David's advice is not tax advice. Consult your CPA. Put a whole.
David Leary: [01:01:24] Disclaimer on this episode.
Blake Oliver: [01:01:25] Now I know David great talking to you. Thanks everyone for joining us. We'll see you again soon.