How Much Does a CPA Make?

Congratulations to Practice Ignition's Top 50 Women in Accounting 2019! Also, the union representing IRS workers is concerned about the agency's coronavirus response, the impact of Covid-19 on remote work, Icahn is shorting commercial office space, tech tools for virtual accounting firms, a Turbotax phishing scam, GE is considering kicking KPMG to the curb, how much CPAs make, ways women can overcome CPA firm gender imbalance, follow-up to the Wells Fargo fake accounts scandal, and Amazon is opening bigger cashless stores.


Show Notes

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Blake Oliver: [00:00:21] The IRS employees are complaining that the agency isn't providing enough access to hand sanitizer, gloves, and other types of protective equipment, even though many of them are opening mail, and handling other people's tax documents. He's heard disconcerting stories about the lack of effort at the IRS to maintain clean workstations, despite recommendations to make this a priority.

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Blake Oliver: [00:02:20] Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.
David Leary: [00:02:23] And I'm David Leary.
Blake Oliver: [00:02:25] I'm really sorry to do this, David, because we just recorded an entire episode about coronavirus and COVID-19 last night, and now we're doing our regular news episode today, but there's more news that has broken on coronavirus, so I gotta start with that. 
David Leary: [00:02:39] Before you do, can we do good news first? Because I promised everybody yesterday we'd try not to talk about coronavirus in today's episode.
Blake Oliver: [00:02:45] Oh, there's good news? Yes, please, absolutely!
David Leary: [00:02:48] One of the big things is very sublatory. Practice Ignition, they announced their Top 50 Women in Accounting for 2019.
Blake Oliver: [00:02:54] This is the second year they've done this?
David Leary: [00:02:57] Yes, second year. If you go through the list, you'll recognize listeners that have tweeted or posted on LinkedIn about us, or left reviews; you'll recognize guests of the podcast; you'll recognize friends that we've hung around with at conferences and taken photos with. It's really cool to see a list like that when there's a bunch of people you know on there. It makes you feel good.
Blake Oliver: [00:03:17] That's awesome. So, that's on the
David Leary: [00:03:22] Correct, and the link will be in the show notes.
Blake Oliver: [00:03:25] I just want to say right now, congratulations to Liz Mason, right there at the top of the list under the banner. I'm gonna go through this later. I didn't see that this was out so that's great. I just have a few coronavirus updates relevant to the accounting world. The union that represents IRS employees is ramping up calls for the agency to improve its coronavirus response. This is covered in Bloomberg Tax. The article came out yesterday afternoon, March 12, around 1:00 p.m.. The union representing the IRS employees is saying that there hasn't been enough done to keep workers safe. Businesses and event organizers across the U.S. have taken precautions to slow the spread of the coronavirus. David, you may have heard that LAUSD just closed all the schools starting Monday, and many, many businesses are working from home, as we talked about on our coronavirus episode, but apparently, the federal government isn't doing very much.
[00:04:24] The quote from the National Treasury Employees Union president, Tony Reardon, is: "The overall government effort to protect employees has fallen far short. The IRS employees are complaining that the agency isn't providing enough access to hand sanitizer, gloves, and other types of protective equipment, even though many of them are opening mail and handling other people's tax documents." He said that he's heard disconcerting stories about the lack of effort at the IRS to maintain clean workstations, despite recommendations to make this a priority. This is important - as mentioned in the article, 45 percent of the IRS workforce will be eligible to retire within the next two years, meaning that they're probably on the older side.
David Leary: [00:05:04] So, they are in the danger zone for COVID-19.
Blake Oliver: [00:05:07] Yeah, because it starts around 50, and then, once you hit 60, that's when the chance of hospitalization and death is much, much higher.
David Leary: [00:05:16] And the IRS is already short-staffed. Wow!
Blake Oliver: [00:05:18] Right. So, imagine if this rolls through the IRS during tax season and a bunch of IRS people are out, they're dead, they're in hospitals for a month. As we talked about on last episode, the AICPA has called for tax season to essentially be delayed. October 15 would be the new deadline, and I think that's- I mean, I don't see how this happens because it's not like the IRS folks can work from home.
David Leary: [00:05:48] They can't work from home. They can't just bring in some people from a different agency, like, "Hey, come take some people from this agency over here; stick them in here."
Blake Oliver: [00:05:58] Yeah, it's highly specialized work. We talked about IRS systems ... You generally don't want people working from home, when they're handling sensitive information, like taxpayer returns and what not, at the government level. Even if that was a good idea, I doubt they have the systems to do that given that we've talked about it on the show, how they are just starting to upgrade their mainframe systems.
David Leary: [00:06:21] I guess you'll just have to monitor that, right. Is there some sort of online bulletin board there IRS employees hang out at? It'd be interesting to stay on top of what's happening internally there.
Blake Oliver: [00:06:32] Yeah, I don't know if any of our listeners know what's going on, or maybe we even have a listener who works there. Let us know. You can call our listener voicemail number. It's (202) 695-1040. That's (202) 695-1040. If you have any inside information on this, if you are in a firm that is dealing with coronavirus, and you have a story to share - maybe you work at the IRS - we'd love to hear from you and find out what's going on, on the front lines. The IRS has taken some action. They have suspended all non-essential travel for 30 days unless it is, "mission critical," and we're gonna see what's going to happen in the coming days, and I'll keep you posted.
David Leary: [00:07:14] When you're talking about remote work, I have an article that the title has the word coronavirus in it, but it's not actually ... I feel like it's really what the article's not about. It's a Medium blog post. It's a little bit of an opinion piece but [crosstalk] 
Blake Oliver: [00:07:25] Well, it's ... Everyone who likes writing about remote work, this is the biggest thing that's happened in remote work since I don't know when. I mean, when have millions of people all of a sudden had to leave the office and go work from home all at once?
David Leary: [00:07:38] It's never happened. You could argue it's never happened. This article is titled: "Coronavirus Is a Preview of Our Self-Isolating Future." So, if you kind of skip through the parts where he talks about the virus and get into ... Some of his article, I think, addresses good takeaways and ideas; but then, he also gets into some of the bigger issues concerning working from home on both an individual, and business level, as well as a global, and societal level. Some of the tips, though, I thought he pointed out ... Working at home, you can go out for a jog anytime you want; come home, and you could be all sweaty, and unkept, and you just keep working.
Blake Oliver: [00:08:12] I've done that.
David Leary: [00:08:13] I've done that myself. The bad thing is, sometimes, that rolls into I'm taking a shower at 4:00 p.m. in the afternoon, which is always bad, as well. One thing that he said he started to do, which I think is a really cool idea, is he started to have remote coffee with co-workers. They each set a video chat up for 20 minutes, and at the exact same time, they all go brew their cup of coffee, sit back down, and chat with each other.
Blake Oliver: [00:08:35] I just got an invite from the team here at Jirav for our first Zoom video happy hour today at 4:45.
David Leary: [00:08:44] Cheers!
Blake Oliver: [00:08:45] We're gonna try that. 
David Leary: [00:08:45] Cool.
Blake Oliver: [00:08:45] Yeah, because I work remote all the time, but most of the team is in- well, the biggest grouping of the team in the U.S. is in San Francisco, and they're all working from home, of course, because it's San Francisco. Yeah, so we're gonna try that.
David Leary: [00:08:58] He also talked about this impact on business in general. As more people do this - work remotely - and companies figure it out, they're gonna need less and less office space. Then, at what point does having an office become a luxury, a 'nice to have,' and companies just cut it off the balance sheet? An indication of this - I don't know if you saw - there was a quick headline that went through ... Carl Icahn- Is it I-can or I-con?
Blake Oliver: [00:09:18] Uh ... I think it's I-con ... Or I-can? 
David Leary: [00:09:28] We need a third executive producer that does nothing but correct our pronunciation on names.
Blake Oliver: [00:09:31] Well, NPR has fact-checkers, and I think that's one of the things that they do, so, maybe someday, we can afford to fact checker.
David Leary: [00:09:40] Fact checker, okay ... He's the legendary short seller. He went after Herbalife, and historically, all these companies he's been ... Now, his current target is commercial office space.
Blake Oliver: [00:09:51] So, he's shorting commercial office space companies thinking that once this all ends, people are not gonna go back to the office, or at least a good chunk aren't?
David Leary: [00:09:58] Probably, it's a smart bet because I think we've talked about, in previous episodes, where, in the whole entire market, it's still one or two percent of workers work from home; it's almost nobody right now.
Blake Oliver: [00:10:10] Three percent of the American workforce works from home full time, but a big, big chunk of the knowledge economy - 50 percent - work remotely at least part of the time. So, the capability for a lot of white-collar workers, a lot of knowledge workers, people who work behind computers, to go to work remotely full time, it's there. It's just a cultural resistance or management resistance to that happening. So, maybe this pushes that forward.
David Leary: [00:10:40] I mean, even if this just moves from three percent to 10 percent, when it's done, it's a monstrous move, and it's going to affect office space and that type of stuff. The other thing [crosstalk] Go ahead, sorry.  
Blake Oliver: [00:10:52] Well, here's a further stat to that that I spotted. This was in The Atlantic. According to the Bureau of Labor Statistics, only 29 percent of Americans can work from home; could do it because of the nature of their job. That's actually a pretty big amount. But only one in 20 service workers can do it. Half of the information workers have the capability to work from home.
David Leary: [00:11:11] That's where this starts to get into societal issues, right? Where, if all the white-collar workers are just working from home - they're not commuting, they're not taking the subway, they're not taking trains - they're not rubbing elbows and getting to be exposed to people of different backgrounds. Then, not only that, it's gonna impact lunch spots downtown, things at that level. But then it goes on to deeper levels. If you never have to commute, as a voter, you're probably not gonna vote on transportation issues-
Blake Oliver: [00:11:38] That's true, yeah. 
David Leary: [00:11:40] -or you're gonna change your opinions on these societal needs. It's just a really good article. It'll spur some thinking, especially right now, when all of you are working at home, just to think about: is there a big, huge impact of working at home beyond coronavirus?
Blake Oliver: [00:11:55] Actually, I think you're right. It could really have some deep impacts on our society. This was happening already; this is just accelerating a trend, right? I've been complaining about housing costs here in California. Every episode, or every few episodes, I talk about how that's pushing people out of California to places like Nevada, Arizona, and they are working remotely with their team that they used to work with in California. Maybe they're at an office, but the two offices are basically remote centers. It's a complex thing because working remotely doesn't mean necessarily working at your apartment or your house. You could be working in an office with other people in offices all over the country. That is happening more, and more, and more. As you said in the past, maybe you work in such a big campus that you end up working remotely with most people anyway. You're on a Zoom call, or a Skype call with people in another building because it doesn't make sense to walk. 
David Leary: [00:12:48] You see this all time. People are two cubes away from each other, and they spend the whole day chatting with each other through Slack, or some product like that. Yeah, totally. 
Blake Oliver: [00:12:56] I have some practical advice for folks who are making the jump to working remotely, and I know there's probably a lot of firms right now that are struggling because there's a small group of firms that have fully embraced remote and cloud. Then, there's a much bigger group that haven't. So, if you are looking for some recommendations for apps that you could use for your specific needs now that you are not in the office, Sandi Leyva wrote a great article on CPA Trendlines called: "Tech Tools for Working through the Coronavirus." She lists 11 solutions for 11 needs, or 11 categories. Should I go through them? 
David Leary: [00:13:39] Yeah, why not? Rattle them off.
Blake Oliver: [00:13:40] Okay, so for appointment setting, she recommends ScheduleOnce, which I actually have used, not for a long time. I use Calendly now, but ScheduleOnce is very powerful. For conferencing, it's either GoToMeeting, or Zoom, or both, depending on your needs. Data collection, they use Google Forms, ShareFile, and eFileCabinet. Their client portal is built using WordPress. I thought that was interesting. They've built a client portal integrated into their website because WordPress is a web-hosting platform. They have a shopping cart on their website through Infusionsoft, which allows people to pay for their services directly on their website with a credit card. They do client emails with AWeber and Infusionsoft. Customer support through their website, Vimeo, which is a video hosting platform, and GoToWebinar. I imagine what they're doing with Vimeo is recording screencasts of how to do things or how to help customers with particular applications and then putting those on Vimeo and sending those links out to people when they have questions. For task management, Sandi is using Flow,, which I've never heard of. Are you familiar with them at all? Might be one worth checking out.
David Leary: [00:14:57] Checking out? Yeah.
Blake Oliver: [00:14:58] It's one of those beautiful, simple task-management tools. I'm gonna go take a look at that. They're using Slack for messaging. Phone calls, they're using Slack, and Zoom. Then, cloud storage, they're using Amazon S3 and InMotion Hosting servers for their hosting of desktop apps.
David Leary: [00:15:16] She wrote this, and it's in- did you say AccountingWEB?
Blake Oliver: [00:15:18] CPA Trendlines.
David Leary: [00:15:20] CPA Trendlines. This could be something that everybody should do with their own firm on their own blog. People are always worried about, "What blog content should I have?" Go blog what your tech stack is. That way, people ... Especially, if you're set up to work in the cloud and take on clients remotely, I think that's a good brag to have right now. If you do have a tech stack, put it out there; put it in your blog; let the people see it.
Blake Oliver: [00:15:44] Yeah, and prospects and clients might really appreciate that because they want to know that they can work with you remotely now because they're probably going to be isolating themselves, if they are 60 or older, and they're paying attention. They're not gonna wanna come to your office, so how can you work with them, make them comfortable with that, when they've never done it before? 
[00:16:02] I wanna add one thing that is very important with the hosting. Sandi says they rent dedicated servers from InMotion Hosting. Dedicated servers, as we have discussed in the past, are critical to security because shared servers are the ones that are more easily hacked by ransomware. So, if you're gonna go with server hosting - which pretty much everyone has to, because there's always one or two apps, especially tax software that you just can't get in the cloud - go with a dedicated server, even though it's more expensive.
David Leary: [00:16:31] Anything else on remote work?   
Blake Oliver: [00:16:34] That's kind of it. It's gonna be really interesting to see what happens during this tax season with the firms that are remote and who have already gone cloud. Are they gonna see a huge return on their investment and be able to grow? Because, really, nothing's changing for them. I mean, I could be working in a remote firm right now, and my life has not changed- other than my son, actually, who's gonna be home now next week, all week. 
David Leary: [00:17:00] That's the one impact of remote work, I see. People are gonna try to work from home because some of these schools are closing- some states are closing schools for three weeks. So, you are probably working from home for three weeks, and your kids are there for three weeks. Maybe this will completely swing the pendulum the other way. Nobody will ever wanna work at home again.
Blake Oliver: [00:17:17] Yeah, well, everybody's in the same bucket here because ...
David Leary: [00:17:20] Yes, we have to figure this out together.
Blake Oliver: [00:17:22] Yeah. I guess, unless you're lucky enough to work at home, and then, you also have a partner who can watch your child full time, then it would be more distracting because your kid's at home, but ... 
David Leary: [00:17:33] I have an idea. 
Blake Oliver: [00:17:35] What's that? 
David Leary: [00:17:35] You could threaten your kids. If they act up, you're gonna make them listen to The Cloud Accounting Podcast. Put it on their phone and force them- almost like an opposite of a grounding, kind of ... Maybe that could be a ... 
Blake Oliver: [00:17:46] My wife and I are trying to figure out how we're gonna educate our child, while he's- home school him, essentially, while he's off from school for the next at least two weeks; could be a month or more. Apparently, Khan Academy has classes, or courses for children. I didn't realize this. I thought it was just adults.
David Leary: [00:18:06] My daughter's done some of those. Yes, it's really, really good.
Blake Oliver: [00:18:09] Yeah, it's good. I guess they go as young as five, or four, or five. So, I'm trying to picture my kid doing an online course and sticking with it, but we'll see. I guess maybe I can set him up a little desk next to me.
David Leary: [00:18:25] He could do that. He could do 
Blake Oliver: [00:18:28] Learn how to code? 
David Leary: [00:18:30] You could have your kids do that. The other one is - somebody tweeted - Bookkeeping Side Hustle, who I think is in the want ads. They tweeted about what to do with your kids, and you can have them learn bookkeeping. Put them to work.
Blake Oliver: [00:18:42] Yeah, I like that. 
David Leary: [00:18:42] That's gonna be the best choice, right? Make your kids do the work when you're "working from home." That might be the best choice on this is just have your kids do your work, and then you kick back and play Fortnite. Should we move on to other bigger, and better things- or not better, but there's some fraud/scam stuff that's been in the news this week.
Blake Oliver: [00:19:00] Yeah. Let's talk about - is it more ransomware?

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David Leary: [00:20:17] There's a phishing scam currently going around for TurboTax, and it has an Excel attachment. You get an email that says, "Your TurboTax case is open," and the body of the message looks like it's a very official email. It says your tax returns about to be rejected, and you need to take this action, and the attachment is in Excel file. When you open the Excel file, it gives you a security warning, then encourages you to type in how to enable macros in your Excel sheet; then it executes these malicious macros and goes from there. 
Blake Oliver: [00:20:46] Oh ... 
David Leary: [00:20:46] So, that was reported in Accounting Today, but they linked to something called, and this is more of a security website, and they have an article called: "The Monster Lurking in Hidden Excel Worksheet." You would love this site. It's all the down and dirty- actually, anybody who loves Excel might love this. It's all the down and dirty stuff you can ... How to build one of these, and what they did to build this malicious script inside Excel.
Blake Oliver: [00:21:14] Oh, to put a virus in Excel.
David Leary: [00:21:16] Yes, essentially. So, if you really want to-  you're working from home, you have some extra time, and you wanna do something super-nerdy with Excel, that's an article worth checking out.
Blake Oliver: [00:21:27] Learn how to build a virus in Excel? 
David Leary: [00:21:31] Yes! 
Blake Oliver: [00:21:31] Oh, boy ... 
David Leary: [00:21:31] Then, there's a super-long article from Microsoft about human-operated ransomware attacks.
Blake Oliver: [00:21:38] What do you mean by human-operated?
David Leary: [00:21:41] A lot of the ransomware attacks are just a payload that just get clicked on and gets executed by you, the end-user. You get phished, et cetera. What these are doing is they're using the remote desktop protocols that are public. They're manually finding a computer, getting into the computer, then, when they're in the computer, they'll manually upload some software they need to poke holes in other computers on the network. They're just manually doing everything, and watching, and stealing credentials, and working their way up to a deeper computer on the system, and then, manually deploying some sort of ransomware attack once they get super-super-deep in.
Blake Oliver: [00:22:18] Gotcha.
David Leary: [00:22:20] They kind of call them "hands-on keyboard attacks."
Blake Oliver: [00:22:24] Interesting.
David Leary: [00:22:24] So, they start it with the remote desktop protocol. Then, they start testing passwords and usernames, like admin, administrator, guest, test - once they gain access, and then it starts to roll up there.
Blake Oliver: [00:22:37] I could see this growing because a lot of firms are gonna set up remote desktop on their computers at work, so that their employees can remote in. Maybe they've never used it before, and they don't configure it in a secure way.
David Leary: [00:22:50] Splashtop who was our ... I think they sponsored us last week, or the week before ... It's for remote access to your computer, so there's software that's available. For anybody that's working from home, it's like, "How do I access my computer that's at the office? I mean, these things do exist, but you have to be very, very careful and make sure everything's locked down.
Blake Oliver: [00:23:07] Yeah, so maybe don't use the built-in remote desktop in Windows and use something that's more secure.
David Leary: [00:23:13] I think, for our users, this article is way super-in-depth, but there's a nice chart in there, and it just talks about the common attack techniques, and then your possible defenses. So, just maybe print out that chart, and then you go down the defensive stuff with your IT department.
Blake Oliver: [00:23:30] Gotcha.
David Leary: [00:23:30] Did you have any security stuff? I have one more, but I didn't know if you had anything? 
Blake Oliver: [00:23:35] No, go ahead.
David Leary: [00:23:37] There's an article on Business Insider about how there's no such thing as an unhackable phone.
Blake Oliver: [00:23:43] Not even my iPhone?
David Leary: [00:23:44] No. So, you think about Corcoran, from last week, who had the phishing scam ... We talked about Bezos, and he was hacked. So, he was hacked through WhatsApp on his iPhone. He clicked the bad link. Her fraud basically was started with an email. The super-rich, and their phones are just as vulnerable as any of us. There's no such thing as a device that can't be hacked. At some level, it's a game of risk management, and the majority of it's still human error. You could build the most secure phone in the world, and if it allows you to download things, or talk to people outside of the world, you are at risk of getting infected and your data getting stolen. It's just proof, even the elites of the world don't have any more security than we do, when it comes to these devices.
Blake Oliver: [00:24:34] So, the lesson here is I should stop taking all the nude photos on my iPhone.
David Leary: [00:24:40] Yeah, that's ... That's what happened with Bezos.
Blake Oliver: [00:24:49] Yeah, right? Well, no ... Was that? Oh, yeah, it was Bezos [crosstalk] 
David Leary: [00:24:52] The weird thing about that- it's a whole 'nother story, and there's lots of articles on it, is he- it was somebody in the Saudi royal family who he was talking to on WhatsApp. They met, and [crosstalk] 
Blake Oliver: [00:25:03] Wasn't it the Crown Prince?
David Leary: [00:25:05] Yeah, I think so. They sent him a link, and then, once he opened it, it slowly ... Immediately [inaudible] it just started taking gigabytes of data off his phone.
Blake Oliver: [00:25:15] So, the lesson here, again, as with e-mails, don't click on something unless you're absolutely sure it's safe.
David Leary: [00:25:22] Yeah. It goes on, and on, and on for that. I think that's it for security type stuff.
Blake Oliver: [00:25:27] Well, I have couple of ways we could go. I've got follow-up on Wells Fargo. I'll let you choose which way we go. So, follow-up on Wells Fargo, or Big Four news. Choose your own adventure, David.
David Leary: [00:25:42] Let's go Big Four news first.
Blake Oliver: [00:25:44] All right. So, KPMG has had some issues with GE. or, actually, it's really vice versa. GE, over the past few years, has had some major issues with its auditor, KPMG. KPMG, which has audited GE since 1909, failed to catch a series of accounting problems in recent years, which resulted in 35 percent of GE shareholders voting, last April, against KPMG continuing as GE's auditor. The company said, after that, it would explore other options. Well, they are now announcing that they will begin their search for a new auditor after the 2019 audit, which they're gonna let KPMG finish out. This is a big deal because the value of their audit business was $133.3 million in 2018. That's according to Audit Analytics, and in the past decade, GE has paid KPMG almost $1.1 billion.
[00:26:42] This is a lot of business. Could be a really big win for another firm. But here's the problem: as detailed in The Wall Street Journal, GE only has three other choices in the Big Four - PwC, Ernst & Young, and Deloitte - and GE has relationships with all those firms that caused conflicts of interest where those firms can't do the audit unless they clear up those conflicts of interest. So PwC, for example, does GE's tax work, and GE outsourced 600 of their employees to PwC. So, those people now work at an office for PwC working on GE stuff. They essentially outsourced that department, and GE couldn't function without it, so that's a problem. Ernst & Young is one of GE's big lobbyists in Washington. They paid Ernst & Young more than any other lobbyist to lobby on their behalf. I didn't even know that EY did lobbying?
David Leary: [00:27:42] I had no idea that the Big Four was doing lobbying for other companies [crosstalk] not just themselves. Wow. 
Blake Oliver: [00:27:48] They do everything. Deloitte has unspecified business ties to GE, some sort of business unit that Deloitte is tied up with that would bar them from being the auditor under the SEC rules. So, KPMG has royally screwed up on the GE audits, and yet because we only have four big accounting firms capable of auditing a giant multinational company, like General Electric, there's no market for this. There's nowhere else for them to go, and they're gonna have to convince, then, one of these other firms to give up that business, which is- generally, the consulting business is much more lucrative than the audit business, so they don't want to give it up. So, we have a really messed up, not-free-market situation here with GE. 
Blake Oliver: [00:28:35] his is probably a good example of why, in the U.S., we might want to consider doing what it looks like could happen in the UK, which is the big regulator there, the Financial Reporting Council, has sent a letter to all the Big Four in the UK telling them that they need to separate their audit and consulting operations in Britain. This was after a string of high-profile audit failures. There was the collapse of BHS, Carillion, and Thomas Cook, and the Big Four firms there audit almost all of the UK's 350 largest listed companies. After that, the public, the regulator- are very, very seriously saying break up these firms and separate out the audit from everything else. I personally think that would be a great idea.
David Leary: [00:29:26] I'm surprised there's not a bigger wave of startups and startup money from VC's going into disrupting the Big Four at this level - at the audit level - because one contract alone with GE is worth $1.1 billion. The audit isn't being attacked in the same way everything else is being attacked-  
Blake Oliver: [00:29:45] But here's the problem with that-
David Leary: [00:29:47] Everybody's building an app for small businesses; everybody's building a cloud accounting app.
Blake Oliver: [00:29:49] Well, here's the huge problem to challenging the Big Four is they are so large that even the next- I don't even know what the size difference is, but if you look at a chart of number of employees and revenue, you go down after four, down to five, six, seven, they're not even close to being the same size and being all around the world the way the Big Four are. So, if you're a big Fortune 500 company with operations all over the place, you need an auditor that's big enough to be able to handle it.
David Leary: [00:30:16] It's quite similar to Anheuser-Busch right, and the beer industry. Samuel Adams, which arguably is a gigantic beer brand; everybody's familiar with it; it's everywhere you go; it's all around the world. I guess, if you take Sam Adams, you add up every other microbrew that's in North America, it's still only one percent of the entire beer industry, if you include Sam Adams with the other 99 percent- or the one percent. It's crazy.  
Blake Oliver: [00:30:39] I don't know what it is, but, yeah [crosstalk] 
David Leary: [00:30:44] They just can't even touch ... 
Blake Oliver: [00:30:44] -these firms are so big in terms of people and their ability to do this thing. They're the only ones who can, and to try and challenge them is impossible. So, it's like a 'too big to fail' kind of situation, right? They're entrenched; they have huge lobbying power; and they can basically set up the system so that it works really great for them. And only when they have a bunch of audit failures, like in Britain, which were way worse even than here, the public turns against you, and the politicians turn against you. We'll see what happens in the UK. That's really gonna be interesting, if the firms actually voluntarily implement the regulator's proposals, because if they don't, then legislation could happen. But the regulator is going first with a voluntary approach, saying, "Do this or else," essentially. So, that's the Big Four news.
David Leary: [00:31:35] Wanna stick with the profession, in general?
Blake Oliver: [00:31:38] Yeah, sure.
David Leary: [00:31:38] So, I know we've talked about - this has been kind of your beat - people are graduating with accounting degrees, and they don't have the skills they need.
Blake Oliver: [00:31:46] Really? That doesn't surprise me.
David Leary: [00:31:48] There's an article: "Amid shifting industry, college accounting programs add technology, data analytics courses."
Blake Oliver: [00:31:56] Where was this?
David Leary: [00:31:56] This article was in the So both UConn, and Sacred Heart University have begun offering graduate certificate programs in accounting analytics, or data analytics, and they're masters of accounting programs. They're encouraging all accounting majors to minor in either business analytics or data sciences.
Blake Oliver: [00:32:15] 100 percent, that's totally the right track. That's cool. At least somebody is doing this.
David Leary: [00:32:20] There's hope and upside.
Blake Oliver: [00:32:22] Well, I've got a little bit of profession news, too - value of the CPA license. We've talked about that in the past.
David Leary: [00:32:29] Yes.
Blake Oliver: [00:32:30] A lot of the value for CPAs is how much you can make as a CPA, and it's always fun to revisit these numbers, and see how you stack up. So, Divvy, over the, on their blog, they've been doing a series of: "How Much Does a ____ Make?" How much does a finance manager make? How much does a CFO make? How much does a controller make? So, they finally got how much does a CPA make. So, overall, CPAs make between $65,000 and $150,000 per year. CPAs make 15 percent more than accountants without certification. That's a pretty substantial amount. Adds up over time. This is national. So it's gonna be very, very different depending on where you are in the country. Going down the list of titles, entry-level accountants are making 40 to 50K; entry-level CPAs are making about $65,000; CPA credit analysts make about $75,000. Big Four-firm CPAs make, on average, 90K. The average CPA salary all around the country - 119K; and then, a senior CPA salary averages $152,000. Half of CPAs get annual bonuses, which can be up to 10 percent of their salary, and salary increases average four to five percent annually, which is higher than in many professions.
David Leary: [00:33:53] Did this get into any male versus female CPAs?
Blake Oliver: [00:33:57] No, they didn't break it down that way [crosstalk] but that would have been good for them to do during International Women's Month.
David Leary: [00:34:03] The reason I ask that is the AICPA had a blog post out about three common challenges and three solutions for women in the profession.
Blake Oliver: [00:34:11] Well, this is a great follow-up to the discussion we had last week on our regular news episode about challenges that women face in the profession with inflexible work cultures, that sort of thing, and sexual harassment, too.
David Leary: [00:34:25] So, one is to find a sponsor - a sponsor, a mentor, somebody that can really help you with your career. There's different mentorship programs you could do to help with that. A lot of them now- companies are focusing on diversity. These mentorship programs are really going for minorities and females first, and you can take advantage of that. Balance your work life; seek flexible work arrangements; talk to your employer about work-from-home programs, work-life synergy, use technology, that type of stuff.
Blake Oliver: [00:34:56] Yeah, of course ... What if your employer doesn't wanna offer that stuff, right?
David Leary: [00:35:03] That was in some of the articles we talked about last week. Identify role models; identify females that have done this well, they've moved up, they're managing their careers well. Then, the solution for that is - this a little bit of a plug  for them - but it's to attend the AICPA and CMA Global Women's Summit. There's a link to the conference that they're gonna do, but that's just their third solution. I think it's very timely in the discussions, that after last week's episode.
Blake Oliver: [00:35:29] Let's see when that is. We'll see if it happens this year, because it is ... Oh, it's November 10 through November 12, 2020 in Miami.
David Leary: [00:35:38] How'd you find out- how'd you locate that date so quickly?
Blake Oliver: [00:35:41] I went to, where you can find all of the conferences, like, a hundred conferences for accounting and finance folks and see if they're still going, when they are ... All sorts of other data, right, David? You've got ways to segment, and filter?
David Leary: [00:35:59] Yeah, so you could see all the conferences by every month, and we're staying on top of them. Even yesterday, we talked about how there was a conference in Australia that hasn't been cancelled yet, and within an hour of us getting off the recording yesterday, they did cancel it. So, that's up to date on that site. 
Blake Oliver: [00:36:16] That was the Accounting Business Expo in Sydney?
David Leary: [00:36:19] That's correct. They just postponed that event now. So, if you go to, if you're wondering, "What's the status of my accounting conference?" that you've attended or paid for, they're all there. Even if they're getting postponed, we're updating the dates, so you know when it's been postponed, too, as well.
Blake Oliver: [00:36:34] So, the last thing I've got this week is the Wells Fargo follow-up. I don't even know how to describe it. Almost, just unbelievable lack of oversight at Wells Fargo by the board and by management and just resistance to actually implementing any of the changes they got fined $10 billion over the last few years for this. So, this week, the chairman of Wells Fargo, Elizabeth Duke, resigned before she was supposed to testify. Congress had her come and testify anyway. I'm wondering if maybe the resignation was a way to get out of it, perhaps, but Congress wasn't having any of it. She resigned. That resignation is outlined in a Wall Street Journal article - link in the show notes. 
[00:37:17] A little bit about her background. Elizabeth Duke joined the Wells Fargo board in 2015, and she became the vice chair in October of 2016, shortly after the bank disclosed that the branch employees had opened perhaps millions of fake accounts without customer consent. She's a former Federal Reserve governor, who worked that job during the financial crisis, and she's also been an executive or CEO at a number of community banks in Virginia. I feel a little bit bad, in that she wasn't on the board, when this whole scandal- or when this whole problem was developing, but she was definitely in charge, when they were responding to it. The other board director who resigned was James Quigley. Mr. Quigley is actually the retired CEO of Deloitte, and he joined the Wells Fargo board in 2013.
[00:38:08] So, they came to the Hill, and they testified. Of course, all of that, as we predicted, was overshadowed by coronavirus. So, basically, the summary of the session, as far as I can tell, is that representatives in Congress hammered Duke, and Quigley, who basically defended themselves. They didn't accept responsibility for it. They said that they did what they felt was right. I'll go ahead and read this section from the article: "Duke, a former Fed board governor, and Quigley defended their oversight of Wells Fargo, saying that while they resigned to avoid further distraction, they did everything they could to drive progress at the bank without overstepping their roles."
[00:38:51] Here's a quote from Duke, "I believe wholeheartedly that we both spent the time, used our judgment, did the inquiries, and did our jobs thoroughly, and completely as we possibly could." Then she added that, "The plans ordered by federal regulators are the responsibility of management," basically blaming management for this and saying that it wasn't her job or the board's job to implement those plans ordered by the federal regulators. Then Quigley said, "Effective governance requires clear separation between management and the board. Anytime those lines get blurred, I believe the enterprise becomes less safe and less sound. I know what I've done as a board member of Wells Fargo, and I'm comfortable with that work and the way I performed that role." Yet you resign? Why resign, if you didn't do anything wrong, right? 
David Leary: [00:39:35] Yeah, and they're probably ... This is gonna get so lower priority, in light of everything else happening in the world, right now. If they can just go away quietly, and probably get a nice severance [crosstalk] 
Blake Oliver: [00:39:48] Oh, I'm sure they'll be fine.
David Leary: [00:39:50] You wanna talk about cashierless stores?
Blake Oliver: [00:39:52] Let's finish up with that. 
David Leary: [00:39:53] Amazon is finally opening its first full-sized cashierless store. There's no cashiers. You just walk in, get you what you need, and you leave.
Blake Oliver: [00:40:03] This is like in my neighborhood, right? You're talking about the one in Woodland Hills?
David Leary: [00:40:06] Well, but this is a real grocery store. 5,000 square feet. 
Blake Oliver: [00:40:10] Yeah. We have two, actually, now.
David Leary: [00:40:11] I'm sorry, 10,000 square feet. 5,000 ... It's not an Amazon Go store. It's a full-sized Go Grocery store.
Blake Oliver: [00:40:18] They're calling it Amazon Go, still, right? Amazon Go Grocery.
David Leary: [00:40:22] Correct. 
Blake Oliver: [00:40:24] Gotcha. They're opening that in Woodland Hills, which is 15 minutes from where I live.
David Leary: [00:40:29] That's what they're gonna ... Because they've said ... I think you mentioned before they closed some grocery store? 
Blake Oliver: [00:40:32] Yeah, it's not the one right across the street from me, it turns out, but it is within- it's a very short driving distance. I'm gonna go there and check it out as soon as I can, as soon as it opens.
David Leary: [00:40:43] It's interesting, Amazon, obviously, regardless of how much people are buying online, grocery sales are still not happening online. People still go to grocery stores.
Blake Oliver: [00:40:53]  You wanna look at the fruit.
David Leary: [00:40:55] People wanna touch ... Yeah, you wanna pick out your stuff. You wanna touch it and smell it, before you buy it. Ultimately, grocery stores, in general, have horrible margins, but Amazon is taking a super-long game. Nobody else would spend five years building one store and then just keep going at it, even though it may not be successful. Amazon doesn't care because their primary mission is to get somebody to say Amazon [crosstalk] 
Blake Oliver: [00:41:18] Well, and you predicted this. You predicted this because I've seen stories that Amazon's really not interested in building out their own grocery stores. They wanna sell the technology to other retailers.
David Leary: [00:41:28] Yes! I have an article- exactly that, yep. 
Blake Oliver: [00:41:30] You called this. You said they were gonna do this, the same way that they opened up the Amazon site to the marketplace. Now, most of their sales aren't actually from Amazon, itself. They're from other sellers who are using Amazon's logistics and warehousing.
David Leary: [00:41:44] Yeah, so first they figured out how to run software and websites really good. That became Amazon AWS. Xero runs on AWS; Quickbooks runs on AWS. The vast majority of apps all of you that are working from home are using right now, today, are probably run on Amazon's web services. Then, all the stuff they figured out about logistics - how to do warehousing, shipping of products, delivery of goods - they are now doing that for other companies. I don't know who they're doing it for, but, essentially, let's say you were Target, and you wanted to have a big warehouse and start shipping your goods all over, you would just basically drop in an Amazon system and use their skills to do that.
Blake Oliver: [00:42:20] Mm-hmm. 
David Leary: [00:42:20] Now, the third thing is they've announced they've strung up a couple of deals with retailers that want to go cashierless. So, you're gonna go into some other store; there won't be cashiers there; and you're gonna be able to buy things, walk-in, grab your stuff, and walk out, and it's all gonna be built on Amazon's technology.
Blake Oliver: [00:42:37] Yep. You scan the QR code in your Amazon app and all the payment is already taken care of. Everything's tracked. You just grab the stuff, walk out. 
David Leary: [00:42:46] It's funny that you say everything's tracked because that's the thing. That's what's gonna be the problem that arises on this, suppose they do these deals with the retail locations - it's like who owns that shopper data? Is it Amazon's data [crosstalk] 
Blake Oliver: [00:42:57] Oh yeah. I mean that's why Amazon's gonna give away this technology for a really low price because of the data. They can then sell more stuff to ... I go to all these retailers; I buy stuff using my Amazon app, then Amazon has that data. They can market more stuff to me that I buy online.
David Leary: [00:43:14] Yep, so they've really started to stack that up. In the meantime, Delaware, they are eyeing a ban on cashless stores, making a law that you have to accept cash.
Blake Oliver: [00:43:27] They're joining New York City, San Francisco, a number of other cities. So, this is a whole state that is gonna ban it. 
David Leary: [00:43:34] Which is interesting because I feel like a lot of- some tips I've been seeing, they're telling people not to pay with cash right now because of COVID-19. So, full circle, the government agencies are telling people to ... They're gonna make laws that you have to pay with- you have to accept cash, but they are recommending people don't use cash, and they're gonna have a $10,000 fine per violation.
Blake Oliver: [00:43:57] Oh, great. Money is so dirty. It's been through all these people's hands. It carries viruses. Gross ... 
David Leary: [00:44:05] That's kind of a full circle ... For all the remote work, and cloud, and cashierless stores, and we're right back to government intervention, as far as you must accept cash, and count cash, and account for cash, which is really hassle for small businesses. We've talked about that in previous episodes.
Blake Oliver: [00:44:24] Yeah, it costs more to manage and account for the cash than it's worth, in a lot of cases, for small businesses. All right- 
David Leary: [00:44:33] And that's all the news I have this week. It was nice to do pretty much a corona-free, virus-free episode.
Blake Oliver: [00:44:40] Well, we tried. 
David Leary: [00:44:41] Mostly. 
Blake Oliver: [00:44:41] I'll have to figure out the percentage of corona infection in this episode, and I'll let you know David.
David Leary: [00:44:47] Hopefully, we get through that.
Blake Oliver: [00:44:49] Yep. Until next week, stay healthy.
David Leary: [00:44:51] Yeah, and if people want to - whether they're working at home and they want to get in touch with you Blake, what's the best way?
Blake Oliver: [00:44:57] The best way, honestly, is for them to call the listener voicemail number. Call The Cloud Accounting Podcast - (202) 695-1040. Let us know what you think about any of the stories we've talked about. Let us know what you're going through this tax/coronavirus season. Just say hi. You can even leave us a review. Although, we actually prefer if you leave the reviews on Apple Podcasts, or on Podchaser because then, other folks, when they're looking for podcasts, will see your review and might be more inclined to subscribe. You are also welcome to contact me on Twitter. I'm @BlakeTOliver, and feel free to connect with me on LinkedIn. Just make sure, when you connect, let me know that you're a listener, so I know who you are. How about you, David?
David Leary: [00:45:43] I am on Twitter and LinkedIn, both @DavidLeary, and invitation's still open, if you want to travel to Tucson, and you wanna go get dinner.
Blake Oliver: [00:45:51] No, no, David [crosstalk] Social isolation! Social ... What is it? 
David Leary: [00:45:56] Oh ... Okay. In 21 days, I think, if you wanna come to Tucson and have dinner, you're allowed to do this.
Blake Oliver: [00:46:00] Don't get on a plane, if you don't have to. Nonessential travel should stop. Go to to see all the conferences, what has been cancelled, what's still going on, and maybe look for a new conference, if the one that you signed up for doesn't work for you anymore. 
David Leary: [00:46:15] I think there's a hundred to choose from.
Blake Oliver: [00:46:17] Wow! All right. Talk to you next week, David.
David Leary: [00:46:20] All right. Bye, everybody.


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