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AICPA Disengage · The Accounting Podcast

• [00:00:00] Thank you to our sponsor, OnPay David Leary: OnPay is an easy-to-use, full-service payroll and HR app that is the right fit for all your clients, whether they have just one or 500 employees, to stay organized, to save time and get compliant. If you're wondering why on pay is so great, it's because it was built by payroll experts with over 30 years of payroll experience, and has the most robust and customizable QuickBooks Online and Xero integrations of any payroll provider. Stay tuned to hear more from our sponsor, OnPay, later in the episode. [00:00:30] Preview Blake: So, how can the AICPA claim to represent all accountants and all CPAs when the pricing of their event- which is a wonderful event. It's beautiful and everything like that, but the way they set it up, the pricing is exclusionary. It excludes anybody who can't afford that multi thousand-dollar expense. It makes me wonder like, is the AICPA’s goal to cast a wide net and to be an association for all CPAs, or is it really just for the folks who can afford it at the top? [00:01:06] The Cloud Accounting Podcast was not considered "press" for AICPA Engage David Leary: Coming to you weekly from the OnPay recording studio, this is The Cloud Accounting Podcast. Blake: Welcome to The Cloud Accounting Podcast, I'm Blake Oliver. David: And I'm David Leary. Like, I just saw you. Blake: Yeah. We saw each other in person in Las Vegas at AICPA Engage. David: Yes. Which I think I don't want to cover AICPA engage. Blake: Why not? David: I'll acknowledge that we were there. Well, it's a little difficult. So, we consider ourselves press. I mean, we are a top, all-time business news podcast. I would say that. Blake: Yes, top 50 business news podcast for many years. David: We have- I think neither one of us have real jobs right now. Like, dub podcast is it. That's our source of income at this point, in a way. Blake: We make a full-time living from this show. David: And you know, Quick- Intuit or QuickBooks, Xero, Oracle, NetSuite, Sage Intacct, AccountingWEB, who- I was actually impressive- all flown us into their events to cover them as press, and we covered the events. Blake: Yes. And we get media passes, which means that we get free tickets to the event. We get sometimes, special access to executives to interview them. David: Wait, interviews. You get to go to the press dinner, you get front-row seats at the keynotes, you get really taken care of as press, and then in exchange, you know, we cover the event. We genuinely cover the event. So, I asked- I didn't even ask for flights or anything, I just asked for passes to Engage, press passes, and I'll read you the response I got. Blake: Who is this from? David: I'm sorry, I pasted in the quote but I did not- it's not anybody we know. It's just somebody that works there. Blake: Somebody in- somebody at? David: In the machine, at the AICPA. Yes, somebody in the machine. So, your request for press passes for Engage. We have a defined set of criteria for those - you have to be working press, period. Blake: I guess we're not working press. David: We're not working press. So then, we won't cover anything Engage. So, I actually had to do- I actually, on accident, marked a bunch of articles that I saw were out there, but they were all Engage coverage of- from another press media. So, I've taken those out of my queue. We're not going to cover all that. The only part I will cover is there's a lot of accountants and bookkeepers that are out there, that were in apps, that were having events outside of the AICPA event. Either hotels next door, pools next door, parties, bars. There was a whole sub-conference happening, and some part of me wonders, maybe next year, we should have a Cloud Accounting Conference Podcast or a Cloud Accounting Podcast- Blake: Conference. David: Conference next door. And we just run our own conference in competition. Blake: Well, yeah. I mean- so, that was very disappointing. We'd already booked travel. We came to Las Vegas and it was fine. We were going to see friends and see- talk to vendors, and to see people around the conference anyway. But yeah, not to get media passes for this event, it makes me wonder why, right? I mean, they know who we are or maybe that's just my ego speaking. Maybe they really don’t. David: Maybe that's the problem. [CROSSTALK]. Blake: Maybe that's the problem. The AICPA has no idea who The Cloud Accounting Podcast is. David: No, I think it is the problem. I think they know exactly who we are, and we're on a list. We’re on a list of do not wake up. But I think their main reason is, I think previous years on the website, you could register for just an expo-and-keynote-only pass. They had some layer level of registration for that. And this year, they really didn't have that. They only had like, a bring-your-significant-other-type pass. And so, that really didn't work either, and didn't have the member and non-member pricing. But there's no real way to participate. And so, that's why I requested the press pass. But like, figured it out- I mean, I think, yeah, we'll figure it out and got in. Blake: I know you think we shouldn't cover the Engage conference because, you know, we weren't there as media. David: Out of protest. Blake: Which to me, is fair. [00:05:11] The price of the AICPA Engage is too high Blake: Out of protest, which is fair. But I do want to talk a bit about the AICPA and what- because, you know, this indicates something to me about them, about the AICPA. And this is the problem that I've had. The challenge that I have with the AICPA, when I think about it. And that is that- David: Before you do that, can I also just say though, it's still a nice conference. It's very well-run. It's top-notch. It's a very, very, very nice conference. Blake: It's also a very, very, very expensive conference to attend. David: Yes, that's true, too. Blake: And that's what I want to talk about, which is- and that's I think what made this sort of extra annoying, which is that if we'd wanted to go, a ticket to AICPA Engage for a non-member is $2,000. Now, that may not sound like a lot of money to some of our listeners who are used to paying that much for a conference. But you know, when you think about how other conferences are less than half that, it's pricey. And it's interesting to me that the premier conference for the AICPA- this is their biggest one, right? This is the conference to be at if you are an AICPA member- is also the most expensive conference you could probably go to, as an accountant. It makes me wonder like, is the AICPA’s goal to cast a wide net and to be an association for all CPAs, or is it really just for the folks who can afford it at the top? And I think if you want to be an organization that welcomes everybody, you need to understand, a lot of CPAs are solo, they have small firms. And for them, spending $800 a year on an AICPA membership, and then $1,700 for the ticket, and then $1,000 on a hotel, that's a lot of money. That's a lot of money, right? And so, I think what happens is that these events, really, the people that you get there are large firms, managing partners, practice leaders, and you don't see your average CPA. David: The accounting twins. They're not CPAs yet, they just graduated. They got their degrees. They couldn’t afford to go to this. Blake: So, how can the AICPA claim to represent all accountants and all CPAs when the pricing of their event- which is a wonderful event. It's beautiful and everything like that, but the way they set it up, the pricing is exclusionary. It excludes anybody who can't afford that multi-thousand-dollar expense. Which again, if you're most CPAs, you know most CPAs aren't making half a million dollars a year like many partners. They're making- maybe they're making closer to six figures, and that's a lot of money to put down on a single conference. So, I would say, like, if I were in charge of the AICPA, I'd be trying to make it- you know, maybe bring down the price a little bit. Maybe you don't need to have it at one of the more expensive hotels in Las Vegas. Maybe there's ways to have a lower ticket price, you know? That's my challenge with the AICPA. Now, hey, look, to be fair, I'm also a little, you know, bent out of shape or hurt that they didn't want us as media. [00:08:24] Disagreements with the AICPA Blake: But that's another thing. It's like if you disagree with the top-down messaging of the AICPA, if you have a different point of view, which we do- like, I talk a lot about how I think the 150-hour requirement for becoming a CPA is exclusionary. It's discriminatory, and it is limiting our profession, and is hurting recruitment. Like, they don't like that, right? Because the AICPA is way in on that. They are saying, “Hold the line on the 150-hour requirement.” David: I think I saw that was tweeted out, so it was in the keynote, they want to hold the line on that. Blake: Yeah. Right. And it's like, well, I almost want to give up, you know, on that. Like, on the- like, it makes me- this sort of experience makes me want to give up on the CPA. I worked really hard to get it, but when I see the leaders of our profession, you know, saying stuff like that, and like, they're talking about how we need to innovate in audit, but what's the innovation that's happening? There's no innovation happening, right? It's all words. It's words and no action. Like, in a lot of cases, it's lip service. And actually, David, we don't even really have to- we don't even have to boycott coverage of the event ‘cause when you read the articles that came out of the event, like, what new came out of the event? Did you see anything new? Anything life-changing, anything that's going to change our profession majorly that came out of this event? David: No, I mean, we probably could compare those to the previous year's announcements and you know, compare them side by side. Blake: It's the same stuff every year, right? David: But it does feel very- it's kind of the same stuff, the same topics, over and over. Blake: The same stuff, every year. Well, the one thing that came out was there was like coverage of CAS, you know, how client accounting services- or just what I like to call it Accounting- is growing like crazy, but yeah, not much else. I mean- David: Yeah. You think there would be a pre- you’d think there would be a I'm not a CPA yet track, right? If you really want to expand the membership at the lower levels, there'd be a way for- and they might have some student pricing. I can't seem to find it on the website, but like, I didn't see any- didn't seem like any students or young people were around, right? In general. Blake: Yeah. You don't see staff- I don't really see staff. Like, there's no staff that go to these events. And this too, it perpetuates this whole model, right? The business model of accounting, which is you have partners and you have staff. And there's this class divide between them, and this whole model perpetuates that. And I think that is going to go away. And I think we will be better off as a profession for it, when we don't have that hierarchy, that distinction line. David: So, the AICPA talks about inclusion. This word inclusion. Everybody loves inclusion and diversity, right? And I think one thing I've learned in the last day, like, diversity sometimes just means diversity in thought, right? But if you- if you're building this conference that's not inclusive because it's cost prohibitive, it's hard to register in general, right? There's a lot of constraints around this. Like, maybe the goal of the AICPA to be truly diverse and inclusive, they should you figure out how to do this conference for a third of the price, but they have 10,000 people attend. Blake: Yeah. You could have a lot more people attend if you did, and do it for less, more people attend, make the same amount of money, right? I mean, maybe you don't do it at The ARIA, right? Maybe you do it at a less expensive hotel. David: Or it has to be at the convention center or something like that. Okay. Blake: Yeah. David: But at least this way, you have this- and that would kind of be fun. Imagine if 10,000 accountants were there. Blake: Yeah. There should be. There's 600,0000- more than 600,000 licensed CPAs in the United States, and how many people go to Engage, right? A few thousand. David: About as many people that listen to this podcast. Actually less. Actually, I think less people go to Engage than listen to our podcast. Blake: Yeah. So, yeah. That's my feeling, is like if- it doesn't matter, you can pay lip service. You can pay lip service to diversity and inclusion, and making a big tent, but unless- if what you're doing is opposed to that, then you're not really doing it. David: Yeah. imagine if they had 20,000 people showing up. This is like a Salesforce, like a monstrous conference. Blake: It could be. It should be- and the AICPA is supposedly an organization that promotes all accounting, not just CPAs, right? It's for all accountants, and there's millions of accountants in the United States. So, I would like to see it become bigger, become less expensive, become more inclusive. You know? David: And plus, this is not just, you know- ‘cause they partner with AICPA Canada, and they partner with- alright, so, this is not even just U.S. accountants that are showing to this thing. Some of them are coming globally as well. Anyways, I did see the actual floor was probably double-sized last year. They had a lot of apps showed up, boosts are nice, there was a lot of variance in the different types of apps that were there. [00:13:13] Thank you to our sponsor, Synder David: This episode of The Cloud Accounting Podcast is sponsored by Synder. Tax season is over, which means you can focus on growing your business, rather than hustling to handle the clients you've already got. But how do you add new clients when you're already so busy? That's easy, with Synder. With Synder, you can automate mundane tasks like reconciliation and categorization, and instead, spend more time on strategy. Thanks to Synder’s new e-commerce insights, you become a trusted advisor to your clients, not just the data entry clerk, give them important tools to know their numbers, and make the right decisions to grow their business. Over 2,000 CPAs are already future-proofing their business with Synder as their secret solution. Ready to join them? To book your free demo, head over to cloudaccountingpodcast.promo/synder. That is cloudaccountingpodcast.promo/synder. [00:14:06] Easier Accounting "patriot" video David: So, just to contrast this, so I tweeted out a video that was sent to me. It was sent to me by somebody- I think it was still @ScottScarano tweet-texted it to me, I think at the time he might've still been at- in Vegas, at- I don’t want to say he was at the AICPA Engage event, but he was definitely there in the area, right? I don't know if you saw this video that I tweeted out. It's from an accounting firm called Easier Accounting. And based on my understanding, is they are not CPAs. They made a video that has now- let’s see- 345,000 views. They released this video on June 2nd. Their previous videos they've ever released for their accounting firm- like, let me explain. Cash basis accounting versus accrual basis accounting have views on YouTube of like 33, right? Like, literally, they didn't exist from a social media standpoint. They made a commercial that says, “Be great. Be American.” And we'll put in the show notes- and I'm not even sure it’ll play well, to play the audio, but people should go find it on my Twitter, or go to the show notes and look at this video. It is about as American as you can get. They got flame throwers, they got grenades. Throwing grenades at a car that says TAXES. They got water skiing, they got- they're throwing him, height-challenged person into a cornhole bucket thing. They have speedboats. It's super, super, over the top, but 300,000 views. It's like, it’s almost the opposite of the event we just went to. Like, it's as far opposite as you could get. It's a disturbing commercial. Obviously, they're going for a niche. Blake: Yeah. Well, that was on June 2nd, 2022, that they published this ad. It's like a minute and 30 seconds. It's kind of depressing, honestly, ‘cause it's so- it goes so over the line. I mean, we're going to have to play a little bit of this audio here. Commercial: Have you ever had a midget wash your balls? Blake: It goes so over the line where like one of the firm owners like, runs down protestors with a truck. David: Yeah. It’s nuts. Blake: It's messed up. David: And then you wonder why- you know, so, after the last school shooting, I just- I deep dived on like IRS and guns, and taxes and guns. And I kind of poked around, and I found these articles about the IRS. Do you know the IRS has like bulletproof vests, night vision goggles, AR-15s? The IRS currently right now, has 500,000 rounds of ammunition stored. Then you wonder why, because these guys are out there pumping commercials with- they're shooting up guns and they're shooting off AR-15s, doping about, “We're going to save you tax money. Don't let- you know, you're hardworking Americans. Don't take the taxes.” It's like then you wonder why the IRS has to prepare because you know they're going to have a conflict one day once they go to enforce maybe these guys’ clients, and they’re going to have to go and, you know, audit them one day. They should be scared to go audit these guys’ clients, based on who they're with their ad. Blake: Yeah. Maybe. David: And then it's like, is the IRS- since they're not CPAs, they're not members of the AICPA, like who can crack down on this? Could the IRS crack down on this? like- Blake: I doubt it. David: Is it even possible? Does it even matter? It's shocking though. It's a little bit of a shocking commercial. Blake: Well, David- David: It worked, though. 350,000 views. Blake: Yeah, that's right. I guess, it sells, perhaps. David: What was that? What was the common denominator? You appeal to those common denominator, it sells. [00:17:45] Article on Deloitte possibly also splitting off their audit from consulting practice Blake: So, one of the big stories that we've been covering over the last week or two has been Ernst and Young talking about splitting off their audit practice from their consulting practice. And now, there's a story in the Wall Street Journal about how Deloitte is considering doing the same. Now, Deloitte has denied this, but it's according to people familiar with the matter, rumors, that sort of thing. David: And we kinda- last week, when we talked about this, this was some of the prediction being made, that this is going to cause a domino, right? Blake: Yeah. David: And then a week later, Wall Street Journal's already breaking some new news about Deloitte. Blake: Yeah. So, you know, I'm not really an expert on the Big Four. Neither are you, David. It's not our world. Fortunately, Caleb Newquist, friend of the show and former Going Concern editor, ex-Big Four auditor himself, and covered them for many years, has offered to come on and talk about it with us. So, let's get him on the line. [00:18:44] Caleb joins the show Blake: Caleb, great to talk to you. Caleb: Great to be here, guys. Blake: You were the erstwhile editor of Going Concern. Caleb: I am. I am the erstwhile editor, yeah. David: Could you repeat that word? Blake: Erstwhile. Caleb: Erstwhile. Blake: And that's not my word. That's Caleb's word. Caleb: That's my word. David: Spell that, please. Caleb: E-R-S-T-W-H-I-L-E. David: Okay. Blake: And- Caleb: And I mostly use it because it irritates Greg. Blake: Greg Kyte, your cohost of the Oh My Fraud podcast. Caleb: Correct. Blake: And really, it just means that you are the former editor of Going Concern. Caleb: Correct. Blake: Where you covered the Big Four. Caleb: I did, relentlessly. Blake: Relentlessly, for years. Caleb: Yeah. Blake: How many years was it? Caleb: Just about nine. Blake: Wow. Caleb: Yeah. From ‘09 until mid-2018. Blake: So, you are the perfect person then to talk to about this story. Caleb: I mean, I'm a good person, I don't know if I'm the perfect person. But I'm- I should be on- I should be on the short list, yeah. Blake: So, on our last episode, we talked about how EY is- EY, Ernst and Young is potentially splitting off their audit function into a separate entity, and consulting is going to go off on its own. Now, there's some overlap, some stuff is going to stay in audit entity, some stuff will go. But basically, it's a big deal, right? Caleb: It is. Blake: The idea of this happening. And now, we have the new news of Deloitte potentially following suit, also splitting off audit. Caleb: Yup. But they did not- but they denied it. Blake: Oh, they denied it? Caleb: They denied it. In the Wall Street Journal article, they said they are committed to their to their business model. Blake: So, what's going on here, Caleb? Caleb: At least for EY, they've had a lot of nasty scandals, like the Wirecard being the most prominent one, I think. And some people have argued that they could just drop the Germany firm. PWC did this years ago in Japan. They dropped the member firm in Japan, got a new firm and started fresh. Arguably, EY could do the same thing. But if you read that article, the chairman of EY basically said, “There's enough pressure where this is a serious option now.” And in general, there's just pressure- there's been pressure for 20 plus years, you know, ever since Sarbanes-Oxley. Deloitte, in the wake of the late 90s, early 2000s, every firm spun off their consulting arm at that time with the exception of Deloitte. And so now, here's Deloitte, biggest firm in the world, 50 billion in revenue, and consulting is growing like gangbusters, and audit is just the slow and steady business it's always been. They must see some benefit to just unshackling the two businesses from each other. But also, the pressure from- ‘cause the SEC is starting to- has announced that it's doing probes into the conflicts of interest. And so, maybe they think this time, the timing’s right, and the situations and circumstances are right to do- to spin off the audit business and let consulting go one way, go audit go the other. And they're both viable businesses, so why not? Make a lot of money for the audit partners maybe, you know, to let them be off on their own. I mean, I think that's the kicker, is that however they do the transaction for EY or Deloitte, there has to- it has to be valuable enough to make it worth the audit partners’ while, otherwise, they probably won't vote to approve the deal. Blake: Right. Caleb: So, there's a lot of money to be made. There's a lot of regulatory pressure, and I don't know. Timing feels good. Blake: You said this is something that's happened before- Caleb: Yes. Blake: -after- and this- it was kind of before my time in accounting, but this was after what Enron, collapse of Enron and- Caleb: Well, it's almost before my time in accounting too. So, like, I don't remember the timing of all this stuff, but like, for example EY. EY spun off their old consulting arm, I think in 2000. And it became- it was acquired by Capgemini, which is a French company. And they spun it off for like 10 or 11 billion. And at that time, there was again, all kinds of pressure because of the conflicts of interest between audit and consulting. And you know, consult- again, at the same time, consulting was growing like crazy, auditing is, you know, the legacy business. And so, the consultants are all mad because they can't do certain deals because of the conflicts of interest. And so, there was enough pressure, I think, externally and internally, that they decided to spin off the firm. KPMG did it. Theirs- their consulting arm became bearing point, which I believe went- then later went bankrupt, and then PWC’s business got sold to IBM, I believe. Somebody's going to have to check me on all this, but if memory serves, they sold their business to IBM. But Deloitte stuck to their guns. They didn't spin off their business, and they kept it, and that is probably why they're the biggest firm today, is they held on to that stuff, and it's just been compounding over the last 20 years. But yeah, we've all been through this before. And if you read Francine McKenna's newsletter, The Dig, it's on sub stack. You know, she's written about this- she written about this- she wrote about this recently too, is that, you know, everything old is new again. And so, you know, the circumstances are a little bit different, the frauds are different, the leaders of the firms are different, but it's just the same old thing. Consulting, big booming business and audit is just the legacy business. And there's pressure both internally and externally. And so- but this time, it seems a little bit different. At least for Deloitte, it seems different, if they decide to do it. Blake: So, it's cyclical right? Caleb: Totally. Blake: The firms get big enough, they become targets for the regulators with these conflicts of interest. And then to get ahead of those regulatory efforts, they break themselves up. Caleb: Yeah. Blake: And then it all starts again because- Caleb: Kinda. Blake: Right? Because the consulting can just grow again, there's no- nothing to prevent it from happening, and the audit partners have these relationships that are perfect for building consulting on top of. Caleb: Yeah. And I would just like to point out- I mean, we've talked about conflicts of interest, but nobody really- like, the end of- the question of auditor independence, nobody gives a shit, right? Nobody cares about auditor independence and all this. It's like- it's kind of the albatross that just kind of hangs on these firms, right? It's something they have to manage around. And so, your point about like, you know, if they keep some of the non-audit business in the audit firm, they're just inevitably going to grow those parts of the businesses again. And like you say, it's cyclical, whereas I've written a couple of times, it's like, just do an audit- just do a purely audit firm and nothing else. The business is worth like- a Big Four audit business is worth $10, $12 billion. That's a good business. David: [CROSSTALK] business. Caleb: That's a lot of money. That's a lot of money. So, you could have your- you could still have in-house tax folks, you could still have in-house valuation folks, you know, finance experts, whatever, but they're purely to service the audit business, and they don't have outside clients. Like, they'd be internal experts versus external, client-facing ones. And so, you could retain all those people but you just wouldn't have revenue streams, right? Blake: Yeah. Caleb: And so, I don't know why- I mean, if people cared about independence, I think that's what they would do, is that they would just have an audit-only firm, but they don't really care about it that much. They're just trying to release- they're just trying to release the pressure for a while, you know, 10 or 20, 30 years, and then we'll be back here again, probably. Blake: Yeah. I always wondered why we don't have just pure audit firms. Like, why wouldn't we, as a economy, as a society, want to have people who really can't have a conflict of interest the way they can now? Like, it just seems so obvious to me, but like you said, maybe it's just because nobody really cares. David: The branding seems like they're independent. The words are used, right? Independent auditors, but the branding is there. Everybody thinks they're independent, but they're really rolled up into this bigger glass. Caleb: Yeah. I mean, I think- so, it's interesting. The branding is something, again, that an audit-only firm could really lean into, right? If you said- if you wanted to do an audit-only firm, and you leaned into this independent public service-minded type of a firm, like, “This is what we do, we do independent audits, and this is all we do, so that's why you should come to us, because no conflicts of interests, no questions about those kinds of issues,” yeah, the independence and the lack of conflicts is something that they could really use to their advantage- a firm like that could use to their advantage. Blake: If anyone cares. David: So, if it's an audit-only firm. Sorry, Blake. If it's an audit-only firm, I'm going to pick and choose- maybe I’d pick and choose then to audit. But unless it makes investors invest in my company, like, if nobody actually finds value in the audit, like, how can they lean into that as a brand, right? Blake: Yeah. If the audit is just a check-the-box activity, which it seems like more and more that's the situation, where you just shop around for the cheapest, easiest audit, I'm thinking, if I'm an audit committee, right, why would I want to make my life harder? I'm just going to go find the auditor that's going to give me the easiest, cheapest audit. And then that's what's keeping audit fees down, right? Caleb: Probably, yeah. Blake: So then- Caleb: But what if- so, I guess- I think the argument that I've made in the past is not only do you lean into the brand of the independence and the lack of conflicts, but then you, you know, maybe again, it would be- it'd be owned by the partners, right? So, it's doubtful that there'd be outside investors. But you'd have- you would hopefully- David: Well, I mean, investors of the company. So, I'm Tesla, right? Caleb: Yup. David: People are investing in Tesla because they think Tesla is going to grow, they’re not investing because I have a good, nice set of books that have been audited. Caleb: Yeah. That they have good books. David: Right, Like, ultimately. And so- Caleb: Well, some people do. David: I mean, so, maybe that's the value prop for the auditors, is like, “Hey.” We don't know because that experiment probably hasn't been done, but like, “Hey, there's this extra tough audit from company X, and they really lean into the brand about how they're independent and et cetera, do those companies have higher valuations that go- you know, to go through [CROSSTALK]. Caleb: I think you could- I think conceivably, a firm could do that, right? Like, that they decide that they devise a methodology that's more rigorous, right? Maybe they make representations with regard to fraud, potentially risky, but potentially, very, very valuable also. So, like, Tesla's a good example. There's all of these questions around Tesla's performance, right, and things that Elon Musk says versus what the company actually produces. If a firm went in there, did the audit, did additional procedures that are forensic or a more in-depth look at the books. Blake: Yeah. Caleb: They could charge more for it, they could make different representations in the audit opinion. It seems like it's an area for an audit-only firm to innovate in a way that's never been done before, and potentially bring additional value to investors because of the nature of the work. [00:30:26] Twitter and fake users Blake: Well, and Elon Musk-related bit of idea is like Twitter. One of the sticking points right now with the whole Twitter acquisition is these fake accounts number. How many Twitter accounts are real? And that would be something that an audit firm, a firm that really just focuses on audit, and audit for the benefit of investors, could come in and say, “We'll do that. We'll audit this number." Caleb: Why not? Blake: "And provide assurance on it." And it's nonfinancial, but it's more important than anything in the financial statements to the investors, especially to somebody like Elon Musk. And like if I just looked at Twitter, I would say, "Yeah, if the number of fake accounts is 20% like he's claiming, and not 5% like Twitter is claiming, like that's a big deal." Caleb: Oh, yeah. Blake: Yeah. David: And you come with your team and you research that, and determine it. And so, you're still auditing, but again, you're not auditing just the financial statements, and it's the concept of this. Blake: Not just the finances. Caleb: An audit-only firm, the notion or the nature of assurance could take these different forms but that's what the firm would do, and that's what they would focus on, and again, it seems like there's areas, you know, where they could innovate and do things that haven't been done before, but because of their expertise, because of the brand, because of the trust, right? PWC has trust solutions now, right? Those kinds of things could potentially be extremely valuable. David: So, well, if this is history and you said this is going to repeat, and this is the same discussion happened 20 years ago, why hasn't anybody done this then? Why do we not see these audit firms [CROSSTALK]? Caleb: Excellent question, David. I don't know. Because these firms are doing so well. They make so much money, they're doing just fine the way things are. It's inertia. Deloitte's making $40 billion a year. I mean, why rock the boat? That's a lot of money and, you know, they have, what, 30,000 or 40,000 partners. I mean, who knows? It's like those partners do very well to just keep things going the way they are. Blake: Caleb, thank you so much for your time. We know you're a busy guy, you got to get going. I appreciate you offering your insight on this pertinent, relevant topic. Caleb: Yeah, it was fun guys. Thanks. David: And before you jump off, Caleb. If we want to get a hold of you now, do they still [CROSSTALK] concern? Like, how do they get a hold of you? Caleb: On Twitter is the easiest place, @CNewquist. David: Perfect. Caleb: Thanks, guys. [00:32:53] Thank you to our sponsor, OnPay David Leary: This episode of The Cloud Accounting Podcast is sponsored by OnPay. As a small business owner, I've had my share of accounting tax, bank feed, and app issues. Some could say I'm a mess, kind of like some of your clients. But as I reflect on the last three years of my business, the one app that I have not had any problems with is OnPay. It has been set-it-and-forget-it payroll. I quickly sign in each week, run payroll in minutes, maybe seconds, and I'm done. I get a perfect sync to QBO. I never think about payments reports to government agencies, because OnPay is doing it all for me. OnPay can do it all for your clients too. OnPay's partner program offers free payroll for your firm, discounts, a dedicated support team of in-house payroll experts who will do all the heavy lifting, from setting up your dashboard, to adding your clients and their employees. They'll even enter any prior wages to make it easy to switch. To learn more about switching your clients to the award-winning OnPay payroll and HR, head over to The cloudaccountingpodcast.promo/onpay. That is cloudaccountingpodcast.promo/onpay. OnPay, switch to better payroll. [00:34:04] CohnReznick charged with improper auditing conduct by the SEC David: So, obviously, we just talk to Caleb about audit problems, right? Well, it didn't take very long but CohnReznick is charged with improper auditing conduct by the SEC. Blake: Oh, no. What did they do? David: So, there's more audit problems. So, they charged three of the partners on Wednesday with improper professional conduct on engagements with two clients in 2017. The two clients were Sequential Brands Group and a cryptocurrency business called Longfin Corp. Essentially, with sequential it was an argument about goodwill, and despite CohnReznick's national office, and own firm owners expressing concerns about this, they basically just accepted what was provided by the client, and just ran with it. So, both of these companies, though, have gone bankrupt, and they misrepresented themselves in those bankruptcy proceedings, or prior to that. And the longfin one, which is the crypto one, they failed to address known issues involving related part third-party transactions, that were employed by Longfin to fraudulently inflated revenues. So, they were inflating the revenues and they didn't really address it properly. Now, the real takeaway here is the- it's only a penalty of $1.9 million. And then the three partners, they basically got fined $30,000, $20,000, and another 30,000. Blake: I mean, you know, that hurts, but when you consider that these partners are probably making $500,000 a year or more, is that really gonna-? David: And they can reapply for reinstatement after a few years, and they've agreed- you know, they all they all agreed that they didn't do anything wrong, they didn't admit anything. Like yeah, it's a little bit of a slap on the wrist in the grand scheme of things. Blake: Yeah, it's not just a little bit of a slap on the wrist, that's what it is, right? That's your bonus. David: And it's crazy that like their own- other partners, and that's the interesting thing about this. If anybody at your own firm is questioning it, that probably means it's not legit, right? Blake: Yeah. [00:36:09] What is the value of audits? Are more failures coming? David: So, the march continues, and this is why people are like, "Don't value the audits, or think the audits aren't valuable," and this is what gets people presuming it's going to be- they're going to be the ones breaking up. Blake: Right, yeah. Well, cause when an audit is just a check-the-box activity and there's not a lot of oversight, you're going to get partners and firms that just do the checking the box, and they don't really audit. It's just a matter of form, and they cut corners, and it's going to get worse. I think that we're going to have a lot more audit failures, and maybe this is why EY and Deloitte are talking about splitting off audit, because they see it coming. I mean, these are smart people, the people in consulting are the smartest, right? David: For the next five to six years, there's going to be just a domino of crappy books that were not audited properly. Blake: Let's think about it, it has to be, right? Because there's a huge talent shortage, it's getting worse, and most of these firms haven't adopted- David: They do creative things like the specs. Because there's new creative things happening. Blake: Right. So, there aren't enough people- there aren't enough people to do audits properly according to the rules and the standards, and there's not technology implemented yet. We were seeing some tech come out to do this stuff, but it's going to take a long time for that to permeate. So, you're going to have talent shortages and what's going to happen is managers, and partners, and directors are gonna start cutting corners. Because they get back the work paper, it doesn't- you know, like they just skip it, right? They'll just skip stuff. Because it's not possible to get the audit done without skipping, without cutting corners. And so, yeah, it is. You know, Francine McKenna was on the Oh My Fraud Podcast for an interview that I highly recommend everyone listen to. She's an expert on auditors, and fraud, and audit quality, and she said this is the golden age of fraud. If you want to commit fraud, financial statement fraud right now, this is the best time ever. David: That's an endorsement. Blake: Right. Which is crazy to think about. Crazy to think about that. We also have to think, do people really care? That's the question, is do investors really care? David: Well, yes, it's good then. If chances are, a lot of the books are cooked, across the board, it's good that investors don't use the books anyways to make investment decisions. So, then it's this question, why are you cooking the books? Like why do you need- if people aren't gonna- they're not making investments based on your cooked books, then why even cook the books at all? Blake: Well, that's a good question. I guess because, like if you do have bad earnings, then yeah, that will tank your stock price. So, the goal is just to keep showing positive earnings. David: The earnings, yeah. Blake: Even if that's not the primary- it can hurt you, it's not going to necessarily help you, right? David: I do have something- good news from the Big Four. I don't know if you [CROSSTALK] to that. Blake: Okay. How about I hold you on that? [00:38:53] Listener mail from Dan on ERC fraud Blake: And I want to do a listener mail, cause we got an email from a listener. So, Dan- this is from Dan, he's a CPA. He said, “Blake, in episode 281, you covered the raid of alliantgroup or alliantgroup, I should say. You asked listeners to write in if we do employee retention credits and see competitors who don't seem to be doing it the right way. Oh, boy, do we ever?" "I'm seeing it constantly, and hear plenty of examples from other practitioners. The level of ERC fraud going on now we'll make problematic R&D claims of the past look like child's play. The credit is so much larger than R&D, and businesses are hungry for more relief money after they all got PPP. The number of shops with aggressive and dishonest marketing is astounding. I have clients tell me they receive multiple calls and emails weekly for these services." "Most promise big relief money before they even get to know the company itself. Certain shops even argue that every business in the country qualifies, all while charging big contingent fees of 10% to 35% of this found money. Aggressive, and downright fraudulent ERC shops are causing major headaches for practitioners caught in the middle. The FOMO among business owners is real." "Everyone wants the money but doesn't understand why their buddy at the golf course got it when they don't qualify. Sadly clients can't discern a reputable provider from a poor one, and they are left angry when their CPA tells them they shouldn't have taken the free money." Thank you, Dan, for that. That's what I was suspecting, and I think that's what our listeners are seeing. David: And I feel like I've seen a lot of rumblings, either a post on Twitter and things like that, where people are like, "Can we just call it what it is, which is a scam or it's fraud?" But I definitely think I saw it at the AICPA Engage conference, there was two or three vendors there that are in that game. Blake: Yeah. David: You know, helping accountants do these calculations, or are offering it as an automated way to do these calculations, and getting these credits. There's startups being launched around this. Blake: And we talked about this, where you, know, that this is- so, the ERC the employee retention credit, you get it through payroll tax filings, right? And you claim it with your payroll tax filing, and then it comes to you as a credit. Like you get a check from the IRS. And the IRS is doing so many of these, there's zero chance- I mean, not zero, but a very, very low chance that any of this will ever get audited. And so, that's why you have people [CROSSTALK]. David: 'Cause it's the best time do a fraud. Blake: Exactly. It's the golden age of fraud. David: Best time to- that, we'll make it the episode title, "The Best Time To Commit Accounting Fraud Is Now." Blake: And we like to talk about PPP fraud, and we highlight the best ones, and I think I've got some more that we could talk about this week. And, you know, the problem with all that is like, that's just tip of the iceberg, right, when you look at how much PPP fraud there was. Like it could be more than a $100 billion. We're talking bigger than like one of the biggest frauds in U.S. history is PPP, just in aggregate. David: But the money got out there in the economy, and it got out so well that everybody's hooked on it, people want more. And now they're doing more frauds to get more money. Blake: I wonder how much of inflation was caused simply by fraud money getting out into the economy. That's part of what I'm wondering. [00:42:12] Thank you to our sponsor, FreshBooks Blake: This episode of The Cloud Accounting Podcast is sponsored by FreshBooks. Recently, I chatted with Twyla Verhelst, director of the accountant channel over at FreshBooks, because I wanted to see what they've been up to. For those who don't know, FreshBooks was the first accounting software I used as a freelance bookkeeper back in 2011, so I've been really curious to see what's new. Turns out, a few years ago, FreshBooks launched a new platform that is now more than just invoicing. FreshBooks is now a full general ledger with financial reports, bank feeds, and journal entries. FreshBooks also has your favorite app integrations, even some embedded ones like Gusto for payroll. And with the launch of their new accounting partner program, Twyla and the FreshBooks team are creating a platform and a partner experience that's showcasing that they're really listening to our feedback. If you want to learn about the benefits of working better together with FreshBooks, head over to cloudaccountingpodcast.promo/freshbooks. That is cloudaccountingpodcast.promo/freshbooks. [00:43:19] Celebrity couple found guilty of bank fraud and tax evasion Blake: Speaking of, there was another celebrity that was indicted. Actually, they were found guilty on federal charges including bank fraud and tax evasion. This is Todd and Julie Chrisley, stars of the reality television show, Chrisley Knows Best. They were found guilty in Atlanta on federal charges. What did they do? David: There's a high ratio of people with reality TV shows committing tax fraud, I think, much higher than other professions. Either they get audited more or they just do dumb shit more, I don't understand it. Blake: What's amazing is that their show is all about how successful they are, but apparently all of that success was based on loan fraud. They took out over $30 million in fraudulent loans from community banks, and didn't file taxes, and all this stuff, and they were using that money to fund a lifestyle that then attracted the TV producers to make this show about how successful they are. David: Fake it till you make it. Blake: And they've been on TV for like nine years. They were just renewed by USA for a 10th season. The Chrisley Knows Best show, and they have a spinoff Growing up Chrisley, featuring the Chrisley kids living in Los Angeles. That was renewed by E! for a fourth season. Yeah. And they've been found guilty. They could go to jail for- what was it? How many years? David: They should have hired Easier Accounting to do their stuff. Those guys have guns, they could have protected them from being arrested. Blake: Amazing, right? David: But did I see correctly, with these Chrisleys, that their accountant got indicted as well? Blake: Yeah, their accountant was helping them. So, definitely. David: Now, was this an accountant that was hired internally by them, that's part of their corporation, or was this like a third-party accountant that was- Blake: So, his name is Tarantino. David: Of course. Blake: And Peter Tarantino, he was hired by the couple, and he was found guilty of conspiracy to defraud the United States, and willfully filing false tax returns. The sentencing is October 6th. So, they're all free on bond and they're going to get sentenced on October 6th. So, that's why I don't know how many years they're going to get, but- David: So, he was in- so, he knowingly knew they were full of shit, so he was part of this. Blake: Yeah. He was helping them out, yeah. So, he was part of this whole scheme for a long time. And they were doing stuff like cutting and pasting numbers and amounts to make fake bank statements they created. Like, to get loans, they create- they created fake bank statements and submitted those to show assets, like, for collateral and all this stuff that didn't exist. I mean, they were really going all out with this, just the total fraud. And you wonder if sometimes, like, about the due diligence on the part of these banks, they're just accepting- they're accepting bank statements, like, scans of bank statements from the client to give out these massive loans, and they're not checking? Like, go ask, right? Go just do a bank confirmation. You're a bank. Go ask the other bank, like, “Is there an account here?” David: Or I think they probably get caught up in the celebrity. Like, we are- it's that common, “Oh, these celebrities walked in. They must be good. I've watched their show on TV. It must be real. The reality is real,” you know? I dunno. [00:46:33] Wolters Kluwer and KPMG are collaborating on a content plan David: Wolters Kluwer and KPMG are collaborating on a content platform. Blake: Content platform? Like, what kind of content platform? David: Yeah. so, I think we've talked about this before, like, Wolters Kluwers has their CCH Answer Connect. It's like a tax resource platform. And I think they recently opened it up to a wider audience or something, I think I remember us covering that in the past. But now, they're going to host content from KPMG's tax newsflash, which is essentially, content that's authored by the Big Four’s Washington National Tax Professionals, who are experienced in drafting tax laws and regulations. So, if you're already a subscriber to CCH Answer Connect, you can now access all the KPMG tax news flash stuff right inside your CCH accounting research manager thing. So, I guess in a way, like KPMG is giving back here, but I'm sure there's some big old fear. There's some money probably being involved, but you know, that's- so, knowledge- KPMG's knowledge I guess, is now going to be shared with other professionals that need it. I just thought that was, you know- we're not only bashing. Sometimes, we see good stuff. [00:47:37] ESG follow-up Blake: Hey, I’ve got some follow-up on ESG. David: Yes. Blake: Environmental, social and governance reporting. So, I've been trying to bone up on this, or learn more about it because, hey, I'll admit. Sometimes, David, you and I talk about stuff on this podcast and we really haven't done like a ton of homework. It's our hot take. So, whenever we do that, I then try to, in future weeks, clarify or understand better. David: Yeah, our hot takes, yes, they drag on. Blake: Yeah. Sometimes, they're wrong. Sometimes, they're right, sometimes, they're a little off. Well, I think we actually had a good hot take on ESG because I ran across this story, this piece in Harvard Business Review by Robert Kaplan and Karthik Ramana. And the headline is, “We need better carbon accounting. Here's how to get there.” And essentially, what these authors are saying is that the main GHG- greenhouse gas- accounting standard is like, fundamentally flawed. The one that we were talking about in our previous show. So, recall how the SEC is proposing to now mandate disclosure of greenhouse gas emissions by public companies. And there are three stages of disclosure. Stage one is direct emissions. Stage two is indirect emissions from purchased electricity, and then stage three, which is the one that blew my mind, is all indirect and direct upstream and downstream emissions, which caused me to say, “How is this even going to be possible? How could you possibly know what all the emissions are from all the inputs to your company, all the products- materials you buy, everything you buy, and then everything you sell, all the way to the end of the product life cycle? It's going to be impossible. And these guys basically say in this article, yes, it is impossible to measure scope three emissions. It's not feasible. They say, “Most companies know only a few of their non-tier-one suppliers and customers well enough to get meaningful data from them. Yet the protocol expects companies with diverse product lines to gather emissions data from all their multiple tier customers and suppliers for each line, a fiendishly complex task. The near impossibility of measuring scope three emissions forced the protocol standard setters to allow companies the option to use industry and regional averages, rather than measure the specific emissions produced by their actual suppliers distributors and customers.” So, they're using averages- industry and regional averages- right? Continuing, “Although the protocol expresses a preference for primary data, it allows the use of secondary data when primary data may not be available or may not be of sufficient quality.” And so, think about this. If they're allowing the use of industry averages- so, this is the problem with then, ESG is, it's not going to be like, really, all that useful because it's just an average of the industry. So, how do you compare different companies in the same industry? They're all reporting scope three emissions when they're just using the average for their industry? It's meaningless data. David: Yeah. I think- Blake: And yet, here we are, moving- and this- by this way, this has been around for like 20, 30 years, this standard now. And so, what we're going to end up with in this march toward this type of reporting is just like, a lot of work for companies, extra work for accountants and auditors, and it's not really going to tell us much, as consumers. [00:51:12] Popular.info article on green stock funds David: Yeah. So, popular.info- I don't know if you’ve ever seen the site or are familiar with this. It's independent press. They take no advertising. So, like, you sign up, you pay, but because they take no advertising, they're not beholden to corporations, et cetera. So, they had an article come out on June 9th, the multi-trillion-dollar greenwashing industry, right? And the article really talks about these ESG funds, right? So, there’s stock funds starting to pop up where like, “Hey, everything we invest in is clean,” right, or- Blake: Yeah. Yeah. These have been around for a little while now. Yeah. David: A little while. Trillions of dollars have flowed in these funds the last few years. And one of the big pumpers of this has been BlackRock. They have these funds, except for- here's the crazy thing. They don't conduct their own analysis. They outsource it to another company. So, they just outsource to another company, and then this other company, their ratings “don't measure a company's impact on the earth and society, rather their ratings measure the potential impact of the world and the company and its shareholders.” Blake: The potential company- the potential impact of the company. Oh no. David: On the- yes, the impact of the world on the companies and its shareholders. So, it's like the opposite, right? Instead of measuring, Blake- Blake, you are a polluter. I'm going to measure your pollution, Blake. Instead, they're measuring, what is the world's pollution going to do to impact Blake? Blake: The risk on me. David: Yes. So, it’s just like- Blake: Well, that's always been the two different parts of ESG, right? One is, we measure the negative external outputs of a company, like the pollution they cause, the social problems they cause, right? All this stuff. And then the other is- which is actually more useful for investors- is like what's the impact of climate change on this company? So, when I invest in it, I know what the risks are. So, you're saying that they're only considering the external risks to the company. David: Yeah. And then they- and this is all game playing, this greenwashing, right? Blake: Yeah. David: So, McDonald's, you know, who has more greenhouse gas emissions in 2019 than other countries like Portugal, right? Blake: Yeah. David: That actually increased. But they actually got a decreased score because you know, apparently, they installed recycle bins at an unspecified number of locations in France, in the UK. So, their score got better. Blake: The score got better. David: But this is really- and I think it's just starting to- the awareness of this is just starting to happen. And it's kind of funny, right? It's like, just as it's exploding, the AICPA is pumping it. So, I don't know. Blake: Oh yeah, they were talking about it at Engage. I know we're not supposed to talk about Engage, but yeah they were talking about how this is the future. But like, there was no mention of the fact that CPAs don't get the audit monopoly on ESG, right? The SE- It's a- so, ESG means- I think the problem is- I don't have a problem with ESG, I just have a problem with the fact that it means something different to everyone you ask. There is no common definition for it. And I don't think it's possible because it's so broad. David: It's hard to count. It's very, very hard to count. Blake: Yeah. Well, and like, here's something that kind of points to the ridiculous nature of it. [00:54:22] Marker Blake: Russia's war prompts a pitch for socially responsible military stocks. This is an article in the New York Times talking about how two Citibank analysts, two analysts from Citi are arguing that the height of social responsibility at this moment requires putting your investment money into the stocks of companies that make weapons to defend Ukraine from Russia. Now, weapons are typically not something that people would include in ESG funds, right? Weapons manufacturers, like, does that sound like ESG to you, David? Probably not. David: No. Blake: But the argument can be made that- people are making the argument that, “Hey, it should be, because you need weapons to defend a democracy from Russia.” David: So, you can really argue it- all of it can be- ‘cause in the same way, Al Gore, he justified his private jet. Like, everybody can like, justify all their environmental damage back to, “Oh, but in the bigger picture, if we didn't do that, we could not solve this other picture.” I don’t know. Blake: Yeah. Right. Yeah. So, the justification for the jet is, “I got to fly around the world to promote reduction of greenhouse gases. So, in the end, I will reduce more greenhouse gases than I emit,” but that's all speculation. You don't know that. David: It just says that. Blake: That's- you know- and so, it just shows like, anybody can manipulate this, right? And I think that's the problem. So, I am in favor though of like, if you want to- well, let's think- let's take a step back and think about this. If we really want to reduce greenhouse gases, if we want to do something about global warming- which I agree with, I think we should- isn't the best way to do it just to like, limit the amount of greenhouse gases that we emit? [00:56:16] What is New Zealand doing for greenhouse gas emissions? David: Well, did you New Zealand’s trying to do that? Blake: Well, not really, though. They're just taxing. They're taxing the methane emissions. David, tell us what they're doing. David: Okay. So, Heather Smith down in- our correspondent down under, she sent us an article and I’ll read the headline. Blake: Yeah, yeah. Go ahead. David: New Zealand to price sheep and cow burps to cut greenhouse gases. Blake: They didn't say farts. They could have said farts ‘cause I think most of it's farts. David: And some background, New Zealand has 5 million people, but they have about 10 million cattle and 26 million sheep. Blake: Right. David: And it is their biggest source of greenhouse gas- those sheep and cattle that just belch, apparently. And they're going to have farmers pay for those emissions. But here's the tricky part of this- and this is, I think the deeper in the article, the real thing that's happening here. This is like a scam, right? This is being pushed by probably, big pharma- or not big pharma, but big farming, right? Blake: Big Ag. David: Big Ag. The proposal includes incentives for farmers who reduce emissions through feed additives. So, you gotta go buy some special dust to put on the food when you feed it to your sheep and your cattle. Blake: It makes them fartless? David: To- I guess. And then- Blake: Is this like giving them like anti-gas medication or something? David: And then, of course- so, you're running your- the revenue from the scheme will be invested in research, and development, and advisory services for farmers. So, instead of you letting the farmer run their farm through their own ability, you're going to tell them how to run their farm, tax them if they don't listen, so you can put that money into reeducating the farmers. Blake: This is getting rather scary. David: It's- so, the big thing- and it's funny. I love how in other countries, they called these tax plan things schemes. I love it. Like, that’s their fault if it’s called scheme. Blake: Yea. Well, ‘cause it has to have a negative connotation. But there, it doesn't, so. David: So, but they're doing that, you know, to stop global warming, so. Blake: Well, so, this is not finalized, I think. Like, this is a proposed- David: It’s a draft plan. It’s a draft plan. Blake: It’s a draft plan. So- and in the past, I read that in the past, this has not been popular because think about it. What's going to happen if you raise the price? If you charge farmers more for their sheep and cattle, they're going to raise the price of the meat and the outputs of that, with the wool, all that stuff, right? So, it's going to raise prices, and is now a good time to be raising the price of meat? Probably not. So- David: And then- and now, how do you measure this? Because the last time I checked, New Zealand is super green. New Zealand is just covered with green, grass and trees and everything. Welll, a lot of that's there because the excrement from all these cattle and sheep, right? Blake: Oh yeah, like all the manure. David: So, doesn't all the green of the island that is benefiting from all these cattle and sheep that's producing oxygen allowed to offset this? Blake: Yeah. Well, you're allowed to offset, I think, some of your costs if you do forestry on your ranch, I guess is part of the idea. But I wonder about the benefit of this. Like, what will actually be the outcome of this? Because agriculture is like 11% of all methane emissions, I think. And methane is not the major carbon- not the major greenhouse gas CO2 is. So, like, is this really going to help? Is this really gonna move the needle? And I think it feels- maybe it feels good, but New Zealand, like when- in the big scheme of things, is so small, it's not. It's not going to move the needle. Like, what you really need to do is reduce emissions from developing countries. That's the way to do- like China and India. David: Yeah. I think it's- this is like, we're just reaching to control more things and try to measure things, but it's all in the same ESG march. It's all related. I don't know if- I don't know. Everybody thinks they know what the future's going to be, and think they have it nailed down. But my understanding is that book- and I’ll have to pull it off the shelf and look at it, but you know, Bill Gates has that book, “The Road Ahead”, and that book came out just right before the internet hit. And that book basically, does not acknowledge the existence of the internet. Right? So, the smartest guy in the room, in theory, who if anybody would know the Internet's coming, did not have that kind of in his book of the future ahead. He kind of was predicting it's going to be like his MSN, TV and AOL, and that- like he did not- and the internet as we know it, the concept of that did not exist in Bill Gate’s book that he wrote basically two and a half years before the internet hit. Like, so, do we believe everybody that's as smart? I don't know. I don’t know. Blake: Well, and the issue with the ESG too is, we're picking stuff to measure now. Will that be the thing that we need to be reducing in 10 years? Is that the thing that- like, is that the thing that is going to make a difference? David: Oh, there are different poisons gonna kill us in the future. We just don’t know which yet. Blake: Well, ‘cause like the thing is, it's not all greenhouse gases that we're measuring, there's five. You know, that the SEC has identified. So, it's only five. So, well, you know, will that pivot people to admitting other gases or like, you know what I mean? David: It’s opportunity cost. It’s all opportunity cost. Blake: Like you said, it's hard to know what's going to end up- it's hard to know the future. So, is any of this going to make a difference? I don't know. [01:01:25] IRS is raising the 2022 standard mile deduction David: Well, apparently, the IRS is purchasing the future a little bit. They're going to raise the 2022 standard mileage deduction as of July 1st. Blake: Oh yeah. Yeah. Then that's unusual that they do this, like, mid-year, because of the high cost of gas. So, what's it going up to? David: It is going- so, business from 58 and a half cents to 62 and a half, moving medical from 18 to 22, and charitable from 14 to- that's staying the same 14. And obviously, they're predicting the future. They think that the cost of gas is not going down anytime soon, and they're trying to account for that properly. Blake: Well, David, I think that's all the time we've got for this week. David, if people want to get in touch with you online, where can they do that? David: I'm on all the socials, @DavidLeary. Blake: I am @BlakeTOliver. You can shoot me an email at Blake@BlakeOliver.com. Let us know what you think about the show, the topics we've discussed. Are we out of our minds? Are we onto something? We want to hear from you. David: What I would love is for everybody to go leave a review on either Apple Podcasts or Podchaser and talk about how this is the best accounting press they've ever came across in the industry, and use the word accounting press. Blake: Accounting press. David: Or hardworking press. Use words like that. Blake: Hard- working press, right? David: Working press. Blake: I guess we don't work. I don't really feel like I work when I do this show with you, David. It feels fun. It's all the prep though that does feel- it is a lot of work to prep for this show. David: Well, we didn't- because we weren't there as working press, we didn't do any work. I didn't roll into the keynotes at 7:00 AM, I didn't take notes and pay attention. Blake: That was nice, not to have to do that. David: Real press has to do that. Working press. So, we didn't work. Blake: We didn't work. David: We just kinda have fun. Blake: You can send us your voicemails. You can send us a voice memo, Blake@BlakeOliver.com. We love those. We play those on the air. You've probably heard them before. And David, yeah, until next week, have a good one. David: Alright, bye. [01:03:19] Classifieds David: Time for the classifieds. [01:03:23] Future Firm David: If you're looking to quickly grow a scalable, systematic, seven-figure accounting firm without having to work 50 plus hours per week, check out Ryan Lazanis’ online coaching membership, Future Firm Accelerate. Designed around Ryan's experience taking his cloud firm from scratch to sale, so that you don't have to reinvent the wheel. You'll get online learning in topics that help you automate and systemize all aspects of your firm. You'll get coaching when you need help with implementation. And you'll also join a collaborative community of hundreds of other forward-thinking firm owners. 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That's advisorsforchange.com/join-our-team, where you’ll find a link to the full position description on indeed. [01:05:00] The Ambitious Bookkeeper David: Are you ready to take your life and bookkeeping business to the next level? Are you aspiring to start your own bookkeeping business? Then hop on over to The Ambitious Bookkeeper Podcast, where you'll find encouragement, support, tools, resources, practical strategies, and actual tips on starting, growing, and running a successful bookkeeping firm. Plus, listen to guest expert interviews that will help you elevate your business and enhance your life. Go to ambitiousbookkeeper.com/podcast and subscribe now. That's ambitiousbookkeeper.com/podcast. [01:05:29] Royalwise Solutions David: Are your bookkeeping clients driving you crazy asking the same questions over and over? They need QuickBooks training and you have more important things to do with your time. Let Royalwise be your training partner. 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[01:06:32] How to advertise in these classifieds David: Want to get the word out about your newsletter, webinar, party, Facebook group, podcast, e-book, job posting, or that fancy Excel macro you just created? Why not let the listeners of The Cloud Accounting Podcast know by running a classified ad? Hit the show notes for the link to get more info.