KPMG predicts routine audit work could shift to AI within 2-3 years with mini...

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript. Blake Oliver: [00:00:04] Kpmg says that within 2 or 3 years, routine testing could become the first major audit area with effectively no human audit team directly doing the work. 2 to 3 years, no human audit team directly doing the work. David Leary: [00:00:22] Coming to you weekly from the OnPay Recording Studio. Blake Oliver: [00:00:30] Hello and welcome back to the Accounting Podcast and Happy Tax Day. I'm Blake Oliver. David Leary: [00:00:36] And I'm David Leary. Yes. Happy coming back to listen. Hopefully hopefully you can those you can just take a break on the last day, the tax day of the year and listen to our podcast for an hour. Join the live stream. Blake Oliver: [00:00:48] You know, David, before tax e-filing became dominant, the tax day at American Post offices was a public spectacle And history.com wrote an article all about how it used to be, how April 15th evolved into a quirky annual event marked by midnight crowds, live entertainment giveaways and brand promotions. But it largely disappeared as taxpayers moved online. We're going to talk about that, but first, let's thank our sponsors. David Leary: [00:01:18] Yeah, our sponsors this week, we have Cloud Accountant staffing on Pay and Worthy. Blake Oliver: [00:01:24] Are you tired of the endless search for qualified accounting talent? You're not alone. Growing accounting firms are struggling to find available and affordable team members when they need them most. Cloud Accountant Staffing has the solution with their revolutionary candidate portal. 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So, David, you got any idea when April 15th became the official tax deadline? David Leary: [00:02:39] No, but I'm old enough to have experienced the rushing my printed return in a line of cars and putting it in a mailbox so that it would get postmarked on the 15th. I am old enough to remember that, but I don't know when that started, but I have driven and did a 11 p.m. drop off at the post office in line with thousands of other cars before. Blake Oliver: [00:03:01] Well, that started in 1955, when April 15th became the filing deadline. And that became that turned the Post office into the place where last minute filers gathered, often in huge numbers. Most branches, they would stay open until midnight. It would create long lines and lots of cars and walk in traffic. And Leslie Kennedy wrote this article on history.com talking about how it became. It morphed into a festive occasion. Um, businesses, media outlets would turn the deadline into a promotional event. And there are some examples in the piece that are fun to imagine. Radio stations broadcasting live from post offices, fast food chains, drugstores, and casinos offering samples, vouchers or giveaways. Barbershop quartets and school groups performing for people in line. There was even a dunk. The IRS agent Booth in Pennsylvania and Florida, which they tied to charity fundraising. And this is the best one in Philadelphia. Playboy showed up with a pink booth and proposed stress relief massages. Um. David Leary: [00:04:13] And this is the only option. You had to have it postmarked. There was no other ways to file like, so it was it. We don't do a lot of things collectively as a civilization in the United States anymore, but that is something we all do. And it's cool to have a human experience in that. Blake Oliver: [00:04:28] That's right. There's only two things that you have to do in life and that's, uh, pay taxes and die. So it's something we still have in common, although now we can e-file. And that started in 1986, although adoption took a lot longer than that, because how many people had computers to file in 1986? By 2011, more than three quarters of Americans were filing electronically, according to IRS data. And by last year, 94% of individual tax returns were filed online. And of course, as more and more tax returns were filed online, fewer post offices stayed open late, and the large crowds and the promotions built around them faded away into history. A fond memory. David Leary: [00:05:17] We should bring that back somehow. Blake Oliver: [00:05:19] Have a tax day party at the post office. Well, David, I've got more tax news. Since it's tax day, you know, we can, uh, we can dig into that or I'm curious to know, what are your top stories this week? David Leary: [00:05:32] I mean, I have, uh, zero had a blog post claiming how they are an AI native operating system called zero OS. I thought that was kind of interesting. Um, I have an article about a high growth accounting firm. Spend almost two times more on marketing than their peers. I also have, um, I don't know if you saw the, uh, Kimberly-Clark. Warehouse. Fire! Blake Oliver: [00:05:54] No! What happened? David Leary: [00:05:55] So I covered on that. We could talk about that story quickly here. It is a little bit of an accounting related. So a worker said he wasn't paid enough at at a Kimberly-Clark distribution center in Ontario, California. Blake Oliver: [00:06:07] What is Kimberly-Clark? David Leary: [00:06:09] They are toilet paper paper goods. So it's a huge warehouse of toilet paper and paper towels and paper goods. And this 29 year old worker did a selfie video, not selfie, but like Instagram or whatever you call it. Social media video. I'm thinking like a boomer today. Blake Oliver: [00:06:27] Made it real. David Leary: [00:06:28] Yeah. He filmed himself starting it on fire. Blake Oliver: [00:06:31] Wow. David Leary: [00:06:32] And he was saying in it that it's because he wasn't paid enough. If you can't pay us living wages, what do you think about this? I could at least afford this later. And he burned the whole thing down. Now, what caught my eye on this is I was watching the San Bernardino County District Attorney Office, and then US U.S. officials had a press conference about this, and it was the value that shocked me. So the inventory value was $500 million, and the building value was about 150 million to 156 million. So these are big numbers. Now, your inventory went from a $500 balance to zero. This is a material event that happened for Kimberly-Clark. And they're gonna have to record this because they can't even record increases to the expected insurance payout until it's more closer to being finalized. They can't record the cash until the insurance does the payoff. So they're going to have a quarterly, pretty big quarterly loss, probably because the insurance provider won't kick in until a future quarter. Like it's a material event that happened. And it just the other accounting story that kind of caught my eye on this is I was wondering, like, is this the only warehouse that's a lot. Kimberly-clark has warehouses all over the country. So it's good to have redundancy because could you imagine, like all your inventory burning to the ground in one day or in one evening. Um, and the other piece that kind of caught my eye about this I was thinking about was how does this affect risk in the future? Well, insurance companies start raising rates on companies that pay their employee lower wages. Is this a real is this a real risk that happened here? Or is this just somebody that was a little, uh, unhinged, a little bit about something that personally maybe happened to happened to him? But welcome. Blake Oliver: [00:08:15] To our. Oh, sorry, David, I didn't mean to cut you off there. David Leary: [00:08:18] Oh, I mean, it's over a half $1 billion of damage in 111. Blake Oliver: [00:08:23] Employee 111 upset employee. Welcome to our live stream, viewers. Great to see you. A boring accountant for coffee emojis today. I've definitely had that many. And we've got a new live stream listener E Higgs. Hey E Higgs says finally live. Make sure you guys cut out that first half second. Oh no. I think what I said came through on the feed. Uh oh. I made a mistake when we started recording. I forgot to turn on local recordings. They notice it after the fact. Uh, we will cut. We will cut that out. All right, back to tax. Back to compliance. Americans spend 11.6 billion hours, 11.6 billion with a B hours completing federal compliance forms. That's the estimate for 2026, anyway. The value of that labor, according to the Bureau of Labor Statistics, is over half $1 trillion $530 billion in labor. Completing federal compliance forms, which is basically mostly federal tax returns. As far as I can tell. I mean, what else do people spend a lot of time on? 62% of those hours go to Treasury forms, including the 1040. The average American spends roughly 12 hours just completing their individual tax return and supporting paperwork. 12 hours. Whew. Um, that makes me feel better because I'm pretty slow. Federal agencies maintain over 10,000 forms and documents, and expect to receive over 210 billion responses in 2026. David Leary: [00:10:05] So is the. Because a lot of the arguments of having the IRS just provide you a return, you sign it or, you know, some of the argumen