AICPA predicts compliance will be almost fully automated by 2040

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript. David Leary: [00:00:04] Police in Brooklyn are looking for someone who walked into an accounting firm in Bay bridge and stole $7,000 of cash right off a 64 year old employee's desk. It happened on June 1st, around 2 p.m. at Eiders and Sons Accounting and Business Taxation on Bay Ridge Avenue. The suspect just walked in, grabbed the cash while the victim wasn't at his desk, and walked out. Coming to you weekly from the OnPay Recording Studio. Blake Oliver: [00:00:35] Hey everyone, and welcome back to the Accounting Podcast, your weekly roundup of news in the profession. I'm Blake Oliver. David Leary: [00:00:41] And I'm David Leary. Blake Oliver: [00:00:42] And we are back from AICPA Engage in Las Vegas. David Leary: [00:00:46] I didn't even comb my hair. I'm just, I just I was like, I'm going fuzzy face, fuzzy head today for the podcast. Blake Oliver: [00:00:52] It's been a week. David. You have some takeaways from AICPA engage the AICPA also released a report around engage about how compliance is being automated. They're saying that by 2040 it's going to be almost completely automated. They've got a report about the impact of that, the future of the profession. We will talk about it. I also have an interview with Shelley Weir of the Florida Institute of CPAs about the threat to the CPA license that Florida has been fighting for the past two years. She has not given any media interviews in all that time. And we've got the first one that is coming in the second half of the program today. We've got that and more. David, first, let's thank our sponsors, our sponsors. David Leary: [00:01:42] This week. We have digits on pay. Savant labs and our cost seg. Let's be honest, accounting software hasn't changed much in decades. The prices keep going up, but the software still expects you to do all the work. Digits. Digits is different. 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To see why hundreds of firms are making the switch to digits at over The Accounting Podcast dot promo digits, that is accounting podcast dot promo forward slash DIGITS. Blake Oliver: [00:02:59] All right, David, let's talk about engage and welcome to our live stream viewers. Great to have you with us on the YouTube and LinkedIn live streams. David, what's your takeaway from engage this year? David Leary: [00:03:10] So it's big. And I think they merged everybody together right? There was like 5 or 6 separate conferences. And I get why they did it because they can see now they have the biggest conference, but it makes the conversations hard because you talk to somebody here, they're a tax person, an audit person. I'm in cast and all your conversations are just all over the board. But your thoughts. But I did get into three interesting conversations with three AI accounting founders. Uh, I just blanked on his name at digits. I just. Blake Oliver: [00:03:41] Jeff. David Leary: [00:03:42] Jeff. Jeff. Jeff. Digits. I talked to him kind of over a beer. I talked to Sasha, the founder of puzzle over a beer, and I also talked to agree. He is the founder of a new app that's coming up called flow glad and just, you know, beer conversations, which are the best kind right to have. And, you know, I've been on this kick about accountants. The good use of AI for accountants would be to code five code, something that does repeated perfect execution over and over and over again. You don't want an agent, you know, having variance, right? You want deterministic behaviors. Yes. And almost like you said, you want AI that will set up all the bank rules in QuickBooks or zero, right? That's right. So that way they execute the same every time. It's not wishy washy. Well, after talking to these three guys, the bell went off for me. What they're all kind of doing is they're doing, I'm going to use the word hidden vibe coding. So you, you're going to chat with these tools and what they're doing on the back end under the covers is basically building a code that's kind of custom to you and your workflows and your needs, even though you're not quote unquote vibe coding. That's I'm going to coin this term hidden vibe coding, essentially. And that's how they're doing deterministic stuff. So you are going to be vibe coding, but based on your questions and answers and saying that's wrong, fix this, go do this. And every time you do that, they're actually creating a custom vibe code just for you in a way. Blake Oliver: [00:05:08] Yeah, it's, it's taking that natural language prompt and instead of just guessing the answer, it's building out an app in the moment and then running, but you never see. David Leary: [00:05:17] It or touch it or know it even exists. But your vibe coding an app under the covers and don't even know it. Blake Oliver: [00:05:22] And that's what basically cloud Cowork is doing behind the scenes. If you're using cloud Cowork. And the difference, I think, between the approach that these founders are taking and the accounting and finance areas, is that instead of building it over and over again every month, every time you say, you know, prompt cloud and it and it creates that, that little app, that code in the background and runs your numbers through there, they are saving that. They're figuring out how to like save that code so that it's the same every time. And that's the difference. That's how you take a probabilistic answer and make it deterministic. David Leary: [00:06:01] Yeah. Instead of just having an agent go touch all these things and work on it, they eventually you're trusting that new line of where they're going to work on it the same way over and over again, which is really the biggest risk I have with the, with the AI stuff. It's like it does it this way today, this way tomorrow. But as that gets tighter and tighter, that's what's going to really help. Blake Oliver: [00:06:20] I did a 7 a.m. session on Tuesday with Sasha Orloff from Puzzle Painful. We did a it was kind of like a podcast discussion, a little fireside chat, if you will, uh, at the conference while everyone had their breakfast. And that was one of my takeaways as well is that, that we've gotten to the point now where we are getting reliable, 100% deterministic outcomes from AI agents with this new way of, of, of using AI. And it's a hard adjustment for us because most accountants have been using these chat bots, which are more or less right, not always under percent, often like 50%, 60, 70, 80%, right. Which is not good enough for us. And suddenly, within months, in less than a year, we figured out how to get to more deterministic outputs. And this is a big change from what we are used to. And so when he surveyed the room, it was clear why, because almost everybody has used a chat bot type tool to do research. Chatgpt, blue Jay text, GPT, whatever. Very few have used something like Co-work cloud Co-work, which is a genetic or puzzle zone, you know, AI close feature or digits, right? Like these, these, these are so new that very few people have tried them. And that's why there's such a difference in how we're thinking about it. Because if you're on the cutting edge, you're seeing the potential and you're seeing what's possible. And something else that came out of the conference that's exciting is the AI CPA's new report rise 2040 Shaping the Future of Finance and Accounting. And this is a big report where they talk to thousands and thousands of accountants around the world and tried to predict or forecast where the profession is headed because of AI. And I think that in many ways they got it right. They are saying. David Leary: [00:08:18] How did you figure that out? Because I saw the press release about this, and then I clicked through to look at the document, and it's like this weird half PDF magazine that flips pages left and right, but it also scrolls up and down, and I couldn't. It was, it was so distracting. I couldn't even pull out the messaging with, with what the reporting on. It's like just, just next time AICPA make a normal slide deck or make a PDF. Don't do this crazy presentation stuff. I couldn't figure it out. It's distracting. Blake Oliver: [00:08:46] I have a hack for you, David, so I had it open in my in Chrome and I was like, is there a PDF version of this? So I just opened up Ask Gemini in the sidebar and I said, find me the PDF and it pointed me to the PDF. So you can get the PDF if you want to run that through Claude and then get a summary. You can do that. I didn't have to because Dan Hood of Accounting Today wrote a really great write up of it and highlighted the main themes. And the biggest takeaway is that AICPA is saying by 2040, routine compliance will be largely automated, and that is the bulk of the work that we do as a profession today, let's say 80%. So by 2040, automated and some people are even more aggressive. Alan Colton, I recently heard him in New York say that it's by 2030. So regardless of how aggressive you are, though, that is pretty soon, right? We're talking in 4 or 5 years at the earliest,