How Smart Is Intuit's New AI "Intuit Assist" (with Jack Castonguay)

Congratulations, LiveFlow, for being named in G2's Fall 2023 report as the leader in the financial analysis category. This accolade is a reflection of LiveFlow's commitment to excellence, outstanding performance, user-friendly experience, and being the preferred choice of accountants and bookkeepers. Stay tuned to hear more from our sponsor LiveFlow later in the episode. The firms have been ignoring, like, economic theory for the past two decades, right? As in, if you like, it's basic supply and demand, right? I would say that's quite. I was being polite. For the longest time, they had an ample supply so they could pay them less, right? And now they're still getting paid less, but now they don't have the ample supply, so they're jumping and they can't backfill. So, economic theory would tell you I'm going to start paying more, right? And they're really not like the way to keep them is just increased salaries, right? I mean, it is sometimes obvious answers are obvious, and if you just pay on more, then they won't want to jump. Coming to you weekly from the OnPay Recording Studio. Hello, and welcome to the show. I'm Blake Oliver. I'm David Leary. And joining us today is Jack, Cass and Gay. How are you doing, Jack? I'm doing great. How are you both doing? Really good. What was that, David? I said, thanks for joining us. Yeah. Jack is an assistant professor at Hofstra University, vice president of strategic content development at Surgent. And I think those are your two main gigs right now, is that right, Jack? Those are the two main gigs. Yeah. And how do you split your time? Luckily, I teach night classes and there's seven days a week. So, you know, standard days and Sundays are still pretty busy for me too. So basically two full-time jobs. It sounds like two full-time jobs. Yeah. Well, you know, this is accounting. So, you're preparing your students for the future. Yeah. When they enter. When they enter. There's some overlap, right? You know, a lot of what I'm teaching and what I'm doing at Surgent, those kind of definitely connect together. Well, I'm so happy that we booked you on the show this week because I was going through my news feeds and I saw a story by Amanda Icon on Bloomberg. The headline is shrinking the CPA pipeline fuels calls to relax education mandate. And you're quoted in here. Congrats for getting quoted in a Bloomberg article. Jack, do you want to give us the gist of this story and your feelings about what Amanda wrote about here? Sure. The gist of the story since 2016, new CPA candidates have fallen almost every year, I think every year but one from a height of 46,000 to now we're down to about 30,000 new candidates. And if you look at the reasons why, I think there's been some studies by the Illinois State Society, the CAQ, two of the biggest barriers to people entering accounting and wanting to become CPAs are, well, the 150 hours, which you all talked about in the show, a good amount, and starting salaries. Right? I think too often we try to say it's one or the other, but it's two different pipeline issues. I think the 150 keeps people from becoming accounts to begin with because you already have to have that extra year. And then once you start down the accounting path, which is like, okay, I'm actually committed to doing the 150, then you realize, you know, salaries have been almost flat in real terms. I'm sorry, flat in nominal terms, probably negative in real terms over a decade. You know, and that creates some disincentives to wanting to carry on through with the CPA. Mm-hmm. Yep. And what are you seeing with your students? Like, how's the pipeline at your college? Most colleges and universities accounting enrollments are down across the board. And unfortunately, that's also twofold. So part of it is some of the pipeline issues, right? The salaries, the 150, the CPA exam with a 50% pass rate give or take. But also part of that is there was a New York Times article this past week where just college enrollments total are down from the height of 18 million in 2016, about 15 million in change now. And we haven't even hit so-called enrollment cliff from all the people who didn't have kids around the 08, 09 financial crisis. So we're, we're down, but I think it's both micro and macro issues that are driving that. Well, and that brings us to technology and AI. We talk on the show a lot about how we can't solve the pipeline crisis by just putting more butts and seats alone. We're going to have to use technology. And we saw a very interesting development on that front from into it this week. David, you attended the, what was it called? It was like a live event they did. Basically, it was a webinar and watch the whole thing and have some thoughts on it. You also brought a clip to the show. Do you want to talk first and then I'll play the clip or do you want to talk the clip or bit and we could at a high level. So into it, obviously, is this is their big AI announcement. We've talked, okay, we're going to see it some announcement from into it and they've been leading up to this on previous episodes of talking about this. And I think on the surface, the arguments are great because I think this video and their press that they put out this week is geared at the street. It's geared at Wall Street. It's not geared at end users. It's not geared at us who are kind of into this stuff. It's really geared at impressing Wall Street. And the argument comes out really great, right? And to it says they have 60 PB, is that Parablops or something petaflops of data, right? 500,000 customer and financial attributes per small business, 500,000, per small business, 60,000 tax and financial attributes per consumer, 20 billion transactions imported annually, 810 AI customer-driven interactions a year, 65 billion machine learning predictions a day, 25 million conversations process, 2 million models running a production a day, 900 AI machine learning patents, right? So all this things stack there, right? It's super important, right? But what I noticed, they didn't get the uptick in their stock bump. The way Microsoft and Google did when they announced their, because Microsoft, hey, we're going to add this to office and we're going to charge more for it and they got the bump. Google said they're going to charge 20 bucks more a river per user for Google office or Google apps, right? And they got a bump in their stock price. And to it's stock did not, the price not, and to it did not say they were going to charge more for this. Maybe that's why I didn't get the bump in price. But obviously it feels like the street wasn't as impressed. In me myself, I kind of stepping back, you know, I'm thinking we're still in QuickBooks online, fudzing with bank feeds that are not the best and perfect in your, so they're stupid sometimes. And then, I mean, let's talk, you want to talk about the OCR bills and receipts that are built in. That doesn't work very well. So like all these things are AI driven, right? Right. So, so let's watch this clip you brought and see if that adds any clarity for our listeners and our viewers as to what exactly into it's doing here. Yeah. So the clip is part of the, it was like a 45 minute presentation. And this is just the TurboTax clip, which actually I think is the only part I was impressed with. Or I think really has legs. Let's take a look. Yeah. Let's take a look at into it assist in TurboTax. Starting on TurboTax.com into it assist will be your shortcut to getting fast and reliable answers to questions about getting started. Like how long does it take? Into it assist will then guide you into starting your taxes. In this case, with live full service, into it assist will welcome you with an onboarding experience to get to know you. It will help you get started by uploading, reading and interpreting common tax forms like your W2 and 1040. So what we just saw on the screen there is the user dragging documents from their desktop onto the screen, uploading the docs. And now TurboTax, or what are they calling this into it assistance? Into it assist is going to interpret. Based on the data you shared into it assist will create a personalized checklist of the remaining documents needed. It will catch that you received company stock and message you to confirm. Then it will inform you that this sale requires you to upload it 1099 B and give you clear direction on how to find that form. And then it will add it to your personalized checklist. Into it assist will guide you to upload the remaining documents, reading, extracting and applying the data to your return. At this point, into it assist will activate the gateway to your tax expert who will prepare and file your return. You're positive. It matches you right there. We've been talking about this, right? We've been saying, hey, somebody's going to take the tax organizer and get it into Chatchee PT in a way. So you don't even have to have your your tax team interact with the clients until every document is done and upload. And obviously, this could be movie magic. But like this is the real use case because the other ones are ridiculous. Some of the other ones were like push them credit cards on people and push in business loans on people. Like I don't know how that's powering prosperity into it. It's questionable at best. But like this really feels like the dream, right? Yes. The the tax organizer has gone away. Is it? But is this that different from their old interview view when it was like, did you have a W2 put it here? Did you get stock from your company? Put it here. So if they do it right, this is going to be better than that because the interview tool made you go through every single possible question. This is only asking you for the documents that it knows you need, just like a human would got it. So and and for our listeners who are not seeing what's on the screen, all of this is happening in a chat based flow where it asks you for some documents to start, you upload those and then ask you for more documents based on what you uploaded and can ask you questions and intelligently interact. And yeah, this could, I mean, for a firm, if a firm had a tool like this, this could reduce the amount of work significantly to get that return done because I feel like a lot of the work is just getting documents, right? And not having what you need. And if you had everything you needed, when you sat down to do that return, it would be a lot faster. I don't know how much. I'd be curious if our listeners could divide that up, right? If you're tracking your time, how much of your time is just collecting versus actually processing and producing the return? I'd be really curious. No, I bet it's a lot because it wasn't in the world of bookkeeping where, you know, I built my firm where halfway through the video, I'll keep playing it. With Paul, a tax expert who can take extra care and explaining topics important to you. Once Paul has completed your tax return, he's ready to review it with you. During the video call, Paul walks through and explains the details of your return. He gives you time to get any open questions answered and lets you know that you can access your refund up to five days early through a credit karma money account. And when you're confident, Paul will sign and file for you. Intuit Assist uses the data it's collected to customize your tax dashboard. It will help streamline your tax prep and remove unnecessary questions as it learns more and more about you. As you move through filing, you may occasionally miss or skip entering certain data. Intuit Assist will constantly check your progress and keep you on track by surfacing and resolving those issues on the spot. That means you're less likely to make any mistakes. Now, let's get you the best tax breaks. Intuit Assist will search hundreds of deductions and credits to surface the ones that you might qualify for. As you continue, Intuit Assist will anticipate where you're likely to have questions and proactively surface insights and the tax prep experience at the right time. It doesn't stop there. If you pause that right there, so I think as our listeners can't see this, the UI is different. So it's a different piece of UI where it's showing your graph and it's scrolling through the tax directions. A lot of animation and eye candy on the screen. But I think that's one of the things into it brought up is they're going to surface AI in the format that's it's best displayed in at the time. It's not always going to be the stereotypical G chat GPT chat box type interface. So that's something that you can't really see unless you see the video. It's ready to show the math and answer follow-up questions every step of the way. This builds confidence as Intuit Assist talks to you in a way that a human would, making you feel safe and confident as if you were sitting across the table from someone. Once you complete tax prep, Intuit Assist will summarize and surface the most important elements impacting your tax return. From highlighting significant increases in income, to unpacking state taxes, to recapping all of your tax breaks, and to how much you'll get, or in this case, oh, if you need that extra assurance to put you at ease, you can connect to a tax expert with one click. We know that owning money makes many lose confidence. This combination of Intuit Assist and human experts is so powerful you'll be more confident in your tax outcome than you've ever been. That means total and complete confidence, like you've never felt before when signing and filing your return. This is the new way of doing taxes. All right, that's it. That's Intuit Assist for Turbo Tax. We also saw examples of Intuit Assist in QuickBooks, not quite as impressive. The main automation that was demonstrated was drafting invoice reminders, customized. Now, that's nice. Being able to customize it for your client with AI, that's kind of neat. But this is something we already have automated. There's add-ons that do this. If, honestly, I wasn't that impressed with that. There was also the cash flow forecasting demonstrated, which to me has a lot of promise, but I'm a little skeptical because if it's just going off based on bills and invoices you've entered in the system, there's only so much that the AI can do. People been attacking this for a decade. AI is not the thing that's going to push over the edge. It's the data that's going to exist or it can do the cash flow. The thing I want to see is I want to see the AI automating repetitive tasks. I want to be able to say, hey, recategorize all transactions in this account for this period or find all the discrepancies in my accounts for this month and help me reconcile and find the error. That's sort of thing. I would be really impressed to see that. Some part of this feels like this was very UI and marketing brand driven. They basically took all, because this is all existed. There's the QuickBooks Assistant. TurboTax had their thing, MailChimp has theirs, and then basically they just rebranded it. It's all to look smell and taste the same. But I don't think if I'm in my QuickBooks Assistant, I can ask a question and it's going to use my TurboTax data. I don't think things are connected under the covers yet. That would be nice one day. It's truly an assistant no matter what you're doing. Then it becomes real revolutionary. A lot of the use kids were like, go get this credit card. This is a horrible demonstration. Help me apply for a new credit card. AI, helping Americans get more in debt than ever before. That's what we need. Actually, I have this article in my stack on how six in 10 Americans are living paycheck to paycheck. Is that really what we need is more debt? Well, I mean, does it also own rocket mortgage of our member correctly? Yes. Not anymore. Oh, they don't. Who about right before the bust? Got it. Two it has really good timing on it. Literally a month before the 2008 crash, right there. One time. All right. Well, Jack, I want to talk to you about blockchain. I know you've published research on it. You've been working on it for a while and we had some news about accounting standards and digital assets. What's the big announcement from FASB? The big announcement from FASB is if you're a company that actually holds crypto assets, you're going to get to carry them at fair value. Currently, it's under the impairment model, which means as soon as it falls, a set, you're technically have to mark it down. Every time it falls, you have to mark it down, but you can never mark it back up. If you bought crypto, let's say at the height, when it got up to when Bitcoin was around like 60,000, if it fell down to 10, you had to take that $50,000 hit. If it goes back to 60, you had to still hold it at 10. Now they are completely wiping that standard and they're saying it's still going to be in changeable asset because by definition, you can't touch it, which makes sense. Now it's going to be carried at fair value and you also have to separate it from your other intangibles. You can't lump it in with patents or franchise agreements or anything like that. If you're an investor, you get a lot more information than you're getting currently from companies right now. This is proposed. Do we have any idea when it will actually go into effect? The FASB voted on it. They voted to push it to a final. We are expecting the final ASU, the accounting standards update. Probably by the end of the year, a reasonable, it'll go into effect. I want to say the planned date on the initial draft was end of the year 2024. Companies will have a year to get this ready. Do you think this will encourage more companies to hold Bitcoin or Ethereum or other cryptocurrencies? Personally, no. I don't think that's going to change it. I think you can make an argument either way. Companies are pushing for the standard, which makes sense because they want to take the gains too. A lot of companies don't like volatility and crypto is highly volatile. Most companies that technically accept it as payment. What they do is the second they get it, they sell it. They essentially transact at that price. They don't really hold it anyways. I think if you're a true believer, like Tesla, MicroStrategy, some of those companies, then you actually want the standard because you want to take advantage of it because you think it's going to keep going up. But honestly, I think if you're most companies, this doesn't change your portfolio holding it's one Iota. This episode of the accounting podcast is sponsored by LiveFlow. If you're really a busy body, your title would read CPB, a certified public busybody. You're a CFO, a controller, a CPA, and yet you've earned so much time on the busy work compiling reports stuck in the land of CPB. Well, LiveFlow's mission is to get you out of there. It's the fastest way to connect your QuickBooks Online to Google Sheets. It's designed to eliminate your extra busy work by automating and scaling your client reporting with live hourly updates. Once you cross the border, some strange and wonderful things start to happen. You stop exporting reports from QBO, you no longer customize your sheets over and over again. Your central nervous system forgets what it feels like to deal with stale data and you enter a state of Nirvana. For your one-way ticket out of CPB land and 20% off your first three months, head over to accountingpodcast.promo-liveflow. That is accountingpodcast.promo-forward-l-i-v-e-f-l-o-w. Welcome back to CPA land. So, David, we got some listener mail. I want to play a couple of voicemails. And we also got some messages. I think this would be a good time to take a listen. And I think at least one of these is on 150, if not both. As you're putting that up, I did get a LinkedIn message from somebody going back to last week's episode. They said he filled out one of his requirements with a class called Native American flute. Oh, there is extra 30 semester hours. Native American flute. That's great. Somebody on my LinkedIn post. Someone on my LinkedIn post also did pickleball for credit. I couldn't believe that. You can get credit for pickleball. I guess if you can get credit for beginning walk slash run, which was the impetus for that post, a listener got credit for beginning walk slash run, then pickleball is fair too. Although arguably you get less exercise and pickleball, then you do walking or running. If it helps, I got credit for exploring the night sky when I was an undergrad. Well, you know, you never know when constellations might come in handy for pointing you in the right direction with your career, right, Jack? All right. Let's take a listen to some of these listener messages. And by the way, if you want to send us a voicemail, you can record it on your phone as a voice memo and email it to us at the accounting podcast, at earmark.me. Hi, Blake and David. My name's Katie Ayer and I'm a CPA tax accountant in full practice out in the Roy Grande, California. And I'm calling regarding the teacher who gave such a bad presentation of what it was to be an accountant to that poor high school student who sounds like a really ambitious, focused young person. What I would tell accounting students and what I do tell accounting students when I go in and talk at the junior college level is accounting teaches you what is really happening behind the scenes. It helps you understand the hidden mechanics of how business decisions get made. And this is key. And I think this would really appeal to high schoolers. My third point is it builds your awareness of when people are BS in year. As in advertising in media, in what you see happening in businesses in your own town, or as you move through life in your own transactions. And I think that ability to up your BS detector is a huge factor of being an accountant and is something that high school students would or should at least be interested in hearing about the profession. Thanks very much. You love the show. Awesome. Thanks for that message. I love that BS detector. I mean, that could be the alternative title for an auditor, you know, BS detector. Think about that way. Here's another message that we got just this morning. Hey, Blake and David, this is Tori Canavo from Irvine, California. I'm a CPA at a local tax firm. And love the show. I've been listening a long time. I'm listening to the recent episode, how to improve the image of accounting. And you guys read at the end are talking about just the issues with the profession, specifically the fact that cash practices are now staffed with less than 50% of CPAs. And then you're talking about the distinctions of tax professionals versus audit professionals. And I think you guys are hitting on the fundamental issue in our industry is the CPA is just too wide. It's trying to address too many different aspects of our industry. And I mean, if I were, if I were made emperor of accounting, I'd probably want to split this up to where you have a lower level designation, something like certified accountant. You know, you can think of this in terms of how it is in the doctor world. You've got general practitioners and then you've got the specific niche things, like surgery surgeons and different specialties. And so something like that where certified accountant means you you understand the fundamentals of double entry accounting, which really is the foundation of our of our industry. You need to know how accounting works. And then branch out from there. So taxation would be a specialty audit would be a specialty. You could have all of these different specialties that are higher level designations that require additional training and testing. But everyone would would would fundamentally be at the basic level understanding the basics of accounting. And I think we're missing that. And I see a lot of that in small business, bookkeeping world, just a lack of understanding of the basics of double entry and what causes assets to go up and what causes liabilities to go down and things like that. People don't understand just just the basics. So anyway, that's what I was thinking. Love the show. Love what you guys do. Thanks so much. So Jack is a professional educator. This is perfect for you. What do you think about that? I think we kind of have that. I think if you have an accounting degree, the way he to describe his certified accountant, not certified public accountant, that's an accounting degree. If you make it through an accounting program and you don't know how assets go up or how they're organized, I'm going to question that accounting program. I promise all my students at Hofstra know how to do that. So I think we have that to a degree. I think on the tax side, we also kind of have that. You have the EA, right? And the EA you don't need an undergrad degree. I think the rules you have to be 18 and that's the limit for you to be able to fly as an EA. So we kind of have it on the tax side. If you have an accounting degree that gives it to you, I understand what he's trying to say because I do think if you take like the CPA exam, for example, and Blake, I know, you know, I've gone back and forth on some of the CPA stuff. It is trying to be everything, right? I mean, you look, yeah, they got rid of BEC as a section, but they kept all the BEC content. All right, they put economics in an audit. They put cost accounting in a bar. So they took all those concepts and kept them and we keep adding more and more and more to the exam and what I kind of need to know and we never take anything away. So I do kind of agree that we do try to ask a little bit of everything from everyone and that may not be the best approach, but I think we have other indicators without making another test taking opportunity or certification. I tend to be pro student and want stuff to be cheaper for them. So I wouldn't want to make something that's also just another costly layer for them to have to get hired. Yeah, I think I got a message from a listener who was saying that they specialize in tax and they see a lot of CPAs come out of school, like they don't know how to do a tax return properly. And you only have to take one tax course in school. And yet most CPAs are known in the public as specializing in tax. And that's a strange situation where we have the public associates, the CPA very strongly with tax expertise, but the education is very minimal. And we spend all this time on accounting standards and gap and audit technique. But most CPAs don't end up working in either of those fields, no, at least when it comes to the public. Yeah, I mean, I think that's part of our image problem too though, right? Because when people hear the word accountant, they think tax, right? Yeah, I'm for, you know, I have my PhD and I'm pretty sure my dad still thinks I'm busy in January, February because I do taxes, right? And I don't do my own taxes. So I think that that is part of the image problem when they see us as accountants, they think tax. They don't actually think all the other things were actually most of the people go into. You know, if you look at masters in taxation programs, they're down 50% across the country. So there's 50% less masters in tax programs over the last decade. If you're in fewer students or going into tax, the taxes actually are pretty, it's such a small part of the curriculum because it's actually a small part of accountants, but I do think it does hurt us when everyone just thinks, oh great, the accountants of the people that make me make me pay the government, right? So that definitely doesn't help our image in me. And maybe that'll just change naturally going back to what we saw with Intuit Assist. If TurboTax can figure out how to do most small business taxes with AI, which seems like that's where they're heading. If it's anything like the individual TurboTax, we're going to see most small businesses. The majority will be filing with AI and not a human CPA. So that could assist this image change because the next generation of CPAs aren't going to be doing taxes. They'll be doing actual accounting, which is exciting, right? Like we are certified public accountants, not certified public tax repairs, right? Yeah, no, I think that'll definitely help, though, because from the image, I do think that's one of the images that hurts us, right? Everyone just thinks taxes and that's such a small portion of what we actually do as a profession. This episode of The Accounting Podcast is sponsored by FreshBooks. FreshBooks Accounting software is built for business owners and their trusted accountants to work better together. It's a full-general ledger with financial reports, bank feeds, and journal entries, and it's an easy-to-use platform which means clients can feel comfortable tracking their day-to-day finances. But that's just the beginning. As part of the accounting partner program, you get access to a host of additional benefits. This includes a complimentary FreshBooks account, dedicated support from their expert team, membership into an exclusive partner community, and a treasure trove of additional resources. 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I've got some more listener feedback, David, so I'm just going to keep plowing through here. This is from Roger on Instagram. Love these clips and podcast. I'm a retired marine and decided to learn a new trade that I can do with my with my body being battered hence accounting. October will be the conclusion of my BBA and starting my master's, Texas, and it's 150 hours. Your podcast helped me get a quicker look inside the profession. I missed out on audit, and so I am focusing on small businesses and cash bases. Thanks, guys. Keep the humor coming. Well, thanks, Roger. Thank you for your service, and it's so great that we're going to have you in the profession. Keep at it. Don't give up. We gained one. We gained one. We gained one. Yeah. Well, Roger has some good news to them because Texas just announced that you can sit for the exam now with 120. Yes, they were one of the last holdouts not alone. People sit to 150. Fantastic. Here is a message from Taylor. Taylor says, I really enjoy the podcast as an accounting senior in college. I notice you guys talk a lot about the pipeline slash shortage problem and what to do about it, but a lot of the stuff you guys talk about highlights the negative parts of the career. Could I suggest making more episodes talking about what you enjoy about your job? I think you both have a platform and should try to use it to get more people interested and do accounting in a positive light. Overall, love the content and please keep it up. So, Jack, we're having you on the show to also talk about why accountants should become accountants. Why students should want a major in accounting and become accountants? What are the bright spots in the profession in your mind? I think the biggest bright spot that we don't highlight enough is, I mean, like you have your own business here, you get a degree in accounting. It puts you on your path to starting your own business way earlier than it does in a lot of other fields. You get, let's call it three, four, at most, five years under your belt, and you can actually go out and start getting your own clients. Whether it's on the tax side, whether it's on the consulting side, whether it's on the bookkeeping prep side, it gives you an opportunity to start your own business. I mean, let's do some quick math here. If you get the 150, you're 26, 27, 28, you can start your own business. And there's not too many of the paths that we can do that. So, that's definitely on the bright side. And two, I think it gives you so many more opportunities. So, you get that degree, you know, we know most people don't go through the partner track. When I was at PWC, I think the estimates were, it was about 2% of new hires to make it all the way to partner. I would guess it's probably lower than that now, because the turnover rates have actually increased over the years. So, they know you're not going to be partner, and you get to see businesses like no one else does, and that gives you an opportunity to go into another business, a whole other line. You know, the average person changes careers three times, not jobs. So, you know, not going to work from PWC to go to work for EY. They change careers three times. And I think those opportunities are way more for you in our field than they are relative to some of the other fields. Yeah, I am so glad that I have a county knowledge because all the financial stuff that I have to do owning my own business is something like I understand, you know. We got a comment here in the live stream from HK Geek. The association with taxes is that much more difficult to break in states that don't allow you to use the title accountant unless you have the CPA designation. And that's Texas is one of those states. So, it's always interesting to me. It's fascinating to me that Texas is the state that is the strongest in terms of protecting the word accountant. You would think it would be a state like California or New York. That would be where I would go first. Yeah, absolutely. Right. Right. It's a state like you think regulation. You think those states. You don't think a red state like Texas. So, here's a message from Eric. Eric said, I am an enrolled agent and certified financial planner. I work in wealth management as a tax specialist at a larger firm helping clients with tax planning strategies. I want to become a CPA so very much, but the 150 credit hours is really standing in my way. I would be absolutely willing to study for the exams and I have a significant experience in tax preparation, tax planning, and so on. I love how you guys always talk about the changes that need to be made to bring a more varied group of CPAs into the profession, just throwing my voice out there as another angle to it. You guys have an awesome podcast and I always listen, even though I don't get IRS CE from it, keep up the awesome work. Actually, you can, well, no, you can't get IRS CE for our show because it has to be federal tax focus the whole episode and we're never all federal tax, but you can get IRS CE for the federal tax updates podcast. Check that one out and listen to that show as well. So that's an interesting message, right? So this is, Eric is an enrolled agent in CFP, but can't become a CPA, even though Eric is super strong in taxes. And it's because Eric would have to go back and get those extra 30 semester hours. And that's somebody who could be joining our profession, you know, or joining the CPA club. I just doesn't make sense to me. Is this a way to bring up the ELE program that Eric can go take? Let's check. What, tell us about ELE. What's that stand for? I'm actually John, I think extended learning engagement or I may be blanking on what exactly stands for. It's you got it, David. I knew it. I knew it when they launched it. Yes, it's experience, experience and learning, right? Okay, there we go. We'll figure it out, but just tell us what ELE is. Yeah, just let's just call it ELE and go from there. So that's a program that the AICPA is sponsoring with Tulane University. They want to add other universities to where if you already have 120 and the 30 accounting credits, you can take an extra 30 credits through this program. It's asynchronous online and it will cost about five grand as their current estimate. So it doesn't count towards the core accounting. So you still need those 30 credits anyways. But if you just need the extra 30, it's a way to do it. So you know, they have that program. But I think if you're going to have that program, Blake, I think you're not talked about this a little bit is why have the limit, right? If you're going to create a program like that or the St. Peter's PWC partnership or their students can get their full extra 30 credits just through internships, then why not just allow a different work experience, right? Instead of one year, make it two years of work experience and you're effectively doing the same thing. Because we're keeping people like Eric out of the profession when, you know, if he has his CFP in his EA, I know he's someone I would want on my team, right? But and I would want him to have the CPA, but the extra 30 credits is the one thing stopping him. And it's just an unnecessary barrier that we create all these workarounds for instead of just moving the barrier. So David found it. ELE stands for Experience, Learn, and Earn. There we go. So here's my question about this program is we know that one of the biggest problems is staff having too many hours in the first few years of their careers and burning out. And having them work and study at the same time seems like a recipe for burnout. Burn out and higher fail rate, right? I mean, I'm not sure about you guys, but we talked about me working two jobs. And the last thing I want to do after a 60 hour, 80 hour work week is come home and study for four hours a night, right? Like, yeah, you're all going to get burned out and you're probably not going to do is great. You know, we see students who do better are the ones who actually pass the exam either during their fifth year when they're getting the extra 30 credits or directly after, right? Like the ones who started before they start working. I had the advantage of being able to take all my sections before I started working. I some students don't have that advantage, but I mean, I can't imagine being on some of my business needs and clients and then having to go on study to BC, right? Like, that's just or far any of them. Yeah, so these programs, they may get the credits, but I'm going to be real interested to see the passin' over afterwards because they're working full-time. And in theory, the firms want to give them the time. But, you know, we talk about the pipeline shortages here all the time. If you have a pipeline shortage, can they really afford to take you off 20 hours a week on a client? I don't think so. I mean, maybe I'm being pessimistic, but I just don't see how they're going to be able to give staff that time when they can't give them time right now. I agree completely. It doesn't add up for me as an accountant. It doesn't add up. Matthew says, exactly right, Jack, seeing a future as a business owner, mentor, etc. helps students better protect the public. Glad to have you a colleague. Glad to have you as a colleague in the higher ed world and enjoy the podcast. Thanks, Matthew. Thanks, Matthew. Matthew's at my alma mater, James Madison. So it gives me a chance to give that a shout out there. So touching on that quote, right, or the message you just brought up there, Blake, talking about how, you know, the accounting lets you do anything to some extent. And if that, the actual one of the problems of this Exodus we have. So I don't know if you saw, like, ADP now is the, you know, they have their ADP research institute, and they usually, you know, it's how many payrolls and all that. But what they, they have a new study, they, they put out about promotions. And what they've discovered is that when people get promoted, many, many times, they leave a company. And it's usually lower earners, right, with less skills, skill type jobs, because even if they get a promotion, now they're just a little bit more valuable, so now you can go get a different entry level job somewhere else for more promotion, right? And they said it's a little tougher, for example, let's say, the petroleum engineer. You kind of can't just jump to a different industry. But to some extent, if you're, if you're in a accountant, and the accounting industry, you're like, this sucks, and maybe you get promoted, maybe you don't promote, get promoted. Like, fundamentally, that's the reason it's so easy to leave accounting. You can go do anything. And every business needs accountants. It's, it's good. It creates, our skills are highly fungible. All right. But it's a good point. But it's, but even because we talk about, oh, we need to pay everybody more in our own industry, promote them, move them up the partner ladder, et cetera. Is that really going to solve this? Because, arguably, the skill set is too broad. Well, I mean, so I think it would solve it though, right? Like, the firms have been ignoring, like, economic theory for the past two decades, right? As in, like, if you like, it's basic supply and demand, right? I would say that's quite, okay. I was being polite. For the longest time, they had a ample supply so they could pay them less, right? And now they're still getting paid less, but now they don't have the ample supply. So they're jumping and they can't backfill. So economic theory would tell you I'm going to start paying them more, right? And they're really not, like, the way to keep them is just increased salaries. I mean, it is sometimes obvious answers are obvious. And if you just pay them more, then they won't want to jump, right? Like, if I'm making 5,000 more than I would at the place I'm going to switch to, I'm probably not leaving, right? Because I'm still going to be an accountant to Blake's point. Why would I leave? So, you know, the firms have a choice. Like, yes, people have options. Well, how do you keep people when they have options? You pay them more, right? You give them more vacation. You give them more time. You give them more benefits. And right now, we're still not seeing that. So David, to your point, yeah, the Exodus is going to keep happening until those economic forces adjust. And if they don't, you know, people are going to keep leaving for more money and less work. This episode of the Accounting Podcast is sponsored by the South Carolina Association of CPAs, SCA CPA. As a listener of this podcast, Blake and I consider you part of the Accounting Podcast community. Sure, it might get you a shirt, stickers, free beer now on that. But wouldn't it be great if you could have a steadfast advocate, boost your career, get leadership growth opportunities, learn from a community of peers, build in-person relationships, or just enjoy life long friendships. That's the power you get from engaging with the State CPA Association, like the South Carolina Association of CPAs. Your State CPA Association is more than just a CPE provider. State CPA associations keep their fingers on the pulse of ever changing business, regulatory and legislative landscape to keep you in the loop and to protect the CPA profession, which in the end protects your livelihood. Whether you're just starting your career or climbing the corporate ladder, joining your State CPA Association can be life changing. And best of all, there's a CPA Association in your State. If you're ready to find out why CPA Association membership is for you, head over to accountingpodcast.promo-slash-sc-a-c-p-a. That is accountingpodcast.promo-forge-slash-sc-a-c-p-a. I want to get your take on this, Jack. In my mind, there's only two ways that starting salaries, or staff salaries, can increase in accounting. One, we redistribute from partners to staff. That chance of that happening when the model is that you have to wait 10 to 15 years to become a partner, you're not going to give that up. That salary up very easily when you had to work so hard to get there. Two, is we increase the value of audits and tax work such that clients pay more and then we can pay our people more. But the problem in audit, which is the one I like to pick on, because two-thirds of accounting grads go into audit, the problem with audit is that audit has become completely commoditized. Every audit among firms of the similar size is identical to the people buying that audit, to the public, to the investors. An audit by PWC, KPMG, Delay, or EY are interchangeable. You just got to get one of them if you're a big public company. Same thing with Grant Thornton, BDO, the Measers, whatever, blah, blah, blah, down the chain. We've done this to ourselves. It's commoditized. It's also game theory. In theory, PWC, if they want to pay their people more, would just raise their audit fees. If they raise their audit fees to your point and KPMG doesn't, well, then that firm is just going to jump to KPMG. We have a collective action problem, to where they all need to do it together. Because if it's just one or the other, then note, you're going to get your exact point there. But you need essentially four of them and then I know for the next group, the next year down, BDO, RSM, etc. Then they need to do it. You need them all doing it at once. But again, game theory says one's going to do it and the other one's going to use it as the old market share. Big picture. This is something that I feel like nobody is talking about in the leadership of the profession. Big picture, we have to fix audit in order to fix the pipeline problem and increase starting sellers. We have to figure out how to increase the value of audit. That means figuring out how to make it not a commodity. To make it differentiated. We need to create flexibility in audits. Not have every audit follow all these rules and be about ticking and tying. It seems like there's zero interest to do that. I mean, what do you need to have that happen? I'm, fortunately, you need a 0-1 and run WorldCon type event to where it's not just people focusing on, oh, this is just a check-the-box exercise. This stuff actually matters. I think we're heading there. You had the FTX fraud. You had the three failed banks, which I don't think was an audit failure to be clear. I've had some people disagree with me on that, but I don't think that was an audit failure. But it's perceived in the public as an audit failure. To say it got a clean opinion, then they were bankrupt three months later. You can't put bank runs in my opinion. But people looked at that as a bad thing. Well, it was even worse than that because the audit opinion was published in the next month, the bank. Very next month, yeah. I mean, again, I don't think it was a failure, but the public thinks it was a failure, right? So I think if we keep having staffing issues on audits, which we're having, I think you're going to have more of those, right? The PCOB is upping enforcement. And if you can't staff the audit, stuff like FTX is going to fall through the cracks. So I think you need something like that to force the issue to say, okay, we need to change. But because to your point, they're not going to do it on the road. They are going to need the regulators mostly pushing on them so much to say, you have to fix this. And I think that's going to unfortunately take a pretty big failure for it to happen. The next end run, what will it be? I think I think I agree with you that it's coming. The question is, I mean, FTX was like that, I guess, but they weren't audited. So they weren't, but on, yeah, by the first, then the first accounting firm. Yeah. We got a comment here from John in the live stream. I'm getting my undergraduate in accounting. I plan on getting a master's to fill in the 150-hour gap. What would be the best degree for my lifelong career? MS Accounting, MS Finance, MBA? What do you think, Jack? So this is kind of an unpopular opinion in our profession. I encourage a lot of students to do double majors, because we talked about David's options earlier. So if you get accounting and business analytics or accounting and finance, that gives you more job opportunities if you get into accounting and you don't like it, right? If you get into it and you love it, yet you sell the 150, you have no issues. If you get into it and you determine it's not for you or you get a business opportunity to go somewhere else, then you have, you essentially, you're giving yourself two skill sets instead of just one. You're playing offense and defense. So in MBA normally, the MBAs are for largely for connections and once you have experience, if you need to go with a strategy type role, things like that. So normally, I would advise people to do the double major, but an MS in finance would probably then be your next best option because you're still getting that separate, that separate track as you would in a double major. What do you think, Blake? Well, I was a music major in my undergrad and I had to go back to school to essentially get the accounting major, the core courses, because I had none of the business or accounting courses. I didn't have a trouble, I didn't actually have trouble with the 150 because I had so many credits, but it was more of those specific courses. For me, I value my undergrad, which was a liberal arts and music degree so much because it gave me this very broad perspective and it gave me a lot of really useful soft skills and everyone talks and accounting about how important soft skills are these days. So I'm in favor of a dramatic change to the education requirement where anyone with a bachelor's degree could sit for the exam, take away those requirements for specific accounting and business courses, because if you can obtain that knowledge in classrooms, that's great. If you can obtain it in work, that's great, or maybe you take some continuing education type courses, you pick it up somewhere else, maybe you had work experience from when you were a kid. If you can get the accounting and business knowledge and you can pass a CPA exam, that should be a test of that knowledge. If you can pass the exam, you know it. If that's not what the CPA exam does, then we've got a big problem. What's the point of the exam? And the bachelor's should really be about creating an intellectual, curious, educated human being. I couldn't have said that better. I couldn't have said that. You're a bachelor should teach you how to think critically, how to learn, how to engage with people, how to communicate. And if you actually look at, I've gone back, because obviously the 150 is a big issue for me too, I'm going back in red articles when they first started putting it in. And if you look at the reasoning now, the reasoning has shifted a full 180. The reasoning for the 150 used to be, we need accounts to be more well-rounded, right? So you have the 120, you have an undergrad in accounting, the CPA exam, you only have technical accounting knowledge. The original reason for the 150 and a lot of the old articles was we need more well-rounded CPAs. We need more cons. We need more critical thinking. And now we're seeing the same groups are making the arguments for the 150 saying, no, we need more technical, more accounting, right? Because now that's what fits. But no, just give people the skills to be functioning members of society, teach them how to learn. And if they can pass the exam, you're ready to be an entry-level accountant. Like no, you're not ready to be partner, but even if you have the 150 and it's all 150 just accounting credits, you're not ready to be partner. So no, I'm, I'm completely with you on that. And one of our YouTube live stream attendees said CPA Examary Few Courses are so comprehensive that they teach everything you need. I believe I could have passed with just Roger CPA alone, or perhaps surgeon. I was going to say that. Thank you for calling out the CPA review courses. But I mean, yeah, we see that too, right? Like not every accounting curriculum in every accounting school can cover every topic on the CPA exam, right? Like we were saying earlier, they keep putting more and more on it and not taking anything off. You know, we have candidates at Surgeon who come in and they don't, they've never had governmental accounting or not for profit. I promise you I can teach you government accounting and not for profit to get you to where you can pass and actually work on it. So yeah, like let's use all these resources we have and not force people to go one way or the other. Well, that's why I love your mix of experience, Jack, because you're in a traditional education system, but you're also in a business that is in the business of teaching these skills, a CPE company, right? And a CPA exam prep company, surgeon. And so you see the benefits of both. And in my view, the problem we have right now is that the education is all locked up in a monopoly of these, you know, traditional colleges and universities. They have a really hard time adapting. Like they're still doing things the same way they've been doing them for 40, 30, 40 years. In a lot of cases, yeah, everything's tied to a transcript when people can have life experiences, they're equal to that transcript. Yeah, transcript. I mean, even take, you know, you just mentioned CPE, right? Like, okay, if I have to have 30 extra accounting credits, why can't I take, I don't care, pick a number, 100 CPE hours, right? Take whatever you think the E equivalent is, why can't I take that from my extra education? Right? Like, because then you're really running the technical and the wheat stuff, right? So the argument that I've heard from professors is that, oh, well, CPE is not the same as accredited college courses. And my response is, well, why then do we require every CPA to get 40 hours of CPE every single year if it doesn't have value? Yeah, it has value. But they, but yeah, they, they are different to your point. Like, we overhauled our curriculum at Hofstra. And I was on the committee that did that. And I can't be more proud of the work we did. You know, because in the college class, so you're getting back to what you were saying earlier, to where you're teaching them other than just the technical, right? The teaching comms, that critical thinking, you're teaching them how to engage with others, on you're teaching them the soft skill aspect, or you should be teaching them the soft skill aspects. I know we do at Hofstra. I won't speak for everybody. So it is different. But no, if now we're hearing the argument that native technical knowledge, then yeah, then why not CPE is by definition mostly technical knowledge. I don't see, I don't see where the conflict is. Going back to our conversation about blockchain, oh, David, it looked like you wanted to say something. Oh, no, I lost it already. All right. No worries. Going back to our conversation on blockchain, Chris Vanover said, interesting comments on the FASB proposed standard changes related to crypto. I was just at an audit committee summit where a PCAOB board member and SEC chief accountant spoke. They spoke to the history of the PCAOB and new regulations. But when I asked what consideration regulators were giving to the talent and people issues in our profession, the answer simply focused on their efforts to modernize the standards, not sure how that's helping to address the elephant in the room. So this goes to the complexity of gap and regulations, like accounting has gotten more and more complex. This is, this is not just my view. This is like the book that I read that changed my mind on this was the end of accounting. I highly recommend that everybody go find that book on Amazon, the end of accounting by Baruch Lev. And he points out how gap and accounting standards have gotten more and more complex over the last 100 years while giving investors less and less useful information. And so here we are in a situation where we are obsessed with teaching accountants more and more technical knowledge to the point where the soft skills get ignored or sidelined. And we require all this extra education in accounting and business. And in the public doesn't see the value. And that's why in my opinion, salaries are stagnated. It's economics. If you don't create value for your end customer, which is investors and audit committees, then you can't raise salaries. Dark Horse CPA says we should continue to emphasize technical skills in promoting accountants so that they become partner without any of the skills needed to be successful at that level. Wait, I'm not sure I understand this comment here. I think I'm thinking of is a lot of partner work is like business development, selling your business, right? Like you're talking the economic side of it. And it's almost like when we have a common theme that you see across firms, companies, not just in accounting. I don't care if we're in the sciences or hospitals or healthcare. You see people get promoted to manager and senior manager, but they have none of the skills that teach you how to coach, how to lead, how to think strategically, right? We take people that are good at accounting and promote them, but they may not actually be good at the next level skills that they need. And dark horse added sarcasm. So yes, I had a feeling that was sarcasm, but I wasn't willing to call it a smiley face emoji or something like that. Well, I just remember like on on the old, you know, in aim, we would do like colon sarcasm. Yeah, like slash sarcasm. JK. That takes me back. Yeah, JK. There you go. Takes me back to the good old days. Romeo hates shrimp said the 150 more pay debate strikes at the heart that a Mac is one of the lowest ROI masters programs aside from teachers. But I agree that these CPA prep programs are way more comprehensive. And that's because they have to be because people are paying for them. And if they don't get the result, they won't pay for them. So that's what I love about CPA exam prep courses. They are so effective in its economics, right? Like the best programs make the most money and invest in modernizing the curriculum to pass the exam. So that's that's like the the economic. I feel like if if colleges and universities had to really compete more and they weren't just guaranteed the supply of students who have to take these courses in order to get their CPA, it would improve the quality of education because competition creates quality. Every account that goes a little bit on that. Yeah, sure. So I look at school like programs like we did, we just overhauled our master's program at Hofstra or right in my PhD, University of Tennessee, where their students are coming out. Our students and Tennessee students are coming out as essentially like data analysts with accounting knowledge, right? Like they are great in tableau. Some of them know how to code. I mean, they are next level. But we don't differentiate in the marketplace. No students get paid the exact same as a student who doesn't know how to use Excel, right? So we've actually updated the program to say, I want our students to have all these skills and we're going to give them the skills. And then the firm say, you know, you that doesn't know how to use a calculator. I'm going to pay you the same as the person who can code and apply it on, right? And the problem is they can take that knowledge and then just go get a job not accounting to David's point from earlier. Like I think the schools are giving more and more skills, but firms aren't differentiating on those skills. Like everyone who starts at PDBC in a certain office gets paid the same, right? Even if you have different skill sets. So, you know, I think I think we need to go away from that model to where if you're an accountant, you make $59,000 a year. That was the quote from Amanda's story. If I'm an accountant with all these extra skills that I've learned in this master's program, that actually added value, pay me more for it, right? I should make more than the person who has the hard code formulas. Now, I think that's something as educators we get frustrated with is we're prepping the students, but then our students aren't seeing the payoffs that, you know, to pay them for the skills that they just got. David, I've got a review I want to read, but I want to give you the opportunity to share anything before we go. No, as you can say, this goes back to the whole having a double major or maybe a minor, right? A minor in computer science or a minor in MIS really ties well with an accounting degree, right? But that doesn't help, it doesn't help you sit for the exam, it doesn't help you get the letters, the credentials, even though you might be way better as an accountant because you have that skill set and just you basically are saying that. Yep. We got a review. It's a one-star review. And the headline is two obsessed one star would be a much better podcast if they weren't obsessed with chat GPT and the 150 hour rule. That's by HGD137 on Apple podcasts. And it's currently the top review because it's the most recent. So if you dear, dear listener, maybe you're a little tired of us talking about 150 and chat GPT, I understand. You can let us know in the comments or in the chat or in, better yet, leave a review for us. And hopefully we can get better than a one-star review. Go to Apple podcasts, put in your review. Let us know what you think. We read them on the air. And let's bump this one down the list, shall we? But the thing is, in a way, we're talking about it not as much as you think because we basically bring the news. And if you could see how many news articles have AI in the title that I have to just be like, this is all crap. So yes, we're talking about it, but we're actually filtering out. We're saving you from listening to lots of crap about AI, lots of crap about the 150 hour rule. But these people got sick of it when you're talking about QuickBooks Live when into it wants QuickBooks Live. Other than about that too much. We're just talking about on our show what the news is. So when something else happens, which when crypto crashed, or something will happen and we won't talk about this. But as of right now, this is what's active. This is what's going on in this space. In short, we are just holding up a mirror to the profession. So if you don't like what you see, maybe think about what we need to change. And there were this week, we had three articles about 150, one in financial times, one in Bloomberg. That's the one you were quoted in, Jack. And one in Fortune. That's three major publications covering this issue in one week. It's a hot topic. What can we say? Sorry, guys. HK says these are the topics everyone is talking about. We have to talk about it. Hey, I couldn't say a better myself. And I think that's a great place to leave things before we go, Jack. Where can people follow you? Connect with you online. I'm on Twitter and Instagram at PR-OF, Jack C. So short for Professor Jack C. And you can find me on LinkedIn. Or I guess Twitter is now asked. But please, you can find me there and I'll be happy to engage with you. Blake, that's how we started to engage with each other. So that's right. And I love engaging with all of our listeners and our guests. I am at Lake T. Oliver. How about you, David? I'm at David Leary. See you all here next week. Thanks, guys. Time for the Classifieds. Your County clients don't want another shiny app they have to log into. They want to be met where they live in their email inbox. Finn Daily does just that. Finn Daily automates the communication of key financial data by sending it to your clients in box. Daily. Try Finn Daily out for free at findaily.io. That's findaily.io. 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