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From OnlyFans Audits to AI Cheating Scandals: Inside Accounting’s Strangest Week Ever

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In episode 465 of The Accounting Podcast, hosts Blake Oliver and David Leary tackle one of the most bizarre unintended consequences of recent tax legislation: IRS agents may soon need to review OnlyFans content at work to determine if digital creators qualify for tax deductions. This absurd scenario perfectly captures the chaos unfolding as artificial intelligence and new regulations collide with traditional accounting practices.

The IRS’s Awkward New Job Requirement

The new “no tax on tips” deduction allows digital content creators to deduct up to $25,000 from their taxes. But conservative groups successfully lobbied to exclude “pornographic activity” from this benefit, leaving the IRS to determine what qualifies as pornography—a definition the Supreme Court has never clearly established.

“Are IRS agents going to have to sit in their offices at work and look at OnlyFans accounts and determine whether or not this content qualifies?” Blake asks. “Supreme Court Justice Potter Stewart famously said, ‘I know it when I see it.’ So that’s my question.”

The timing couldn’t be worse. The IRS just closed hardship telework requests, forcing employees back to the office while the agency faces a backlog of over 8,000 accommodation requests and has lost 25% of its workforce through voluntary separations this year.

David raises another complication: “If somebody did one video that got determined to be pornographic, do you lose the whole deduction or can you claim all the other days that you got tips?”

Tax professionals face their own dilemma. “Let’s say you get a client who says they want to claim the tips deduction, and they’re an online creator,” Blake explains. “Are you going to check out the content and decide whether it qualifies?”

When AI Meets Ethics—The KPMG Scandal

While the IRS grapples with content moderation, KPMG Australia is dealing with its own technology-related embarrassment. Multiple auditors were caught using AI and group chats to cheat on mandatory compliance training during 2023-2024. This happened after KPMG had already paid a $50 million fine for exam cheating from 2015-2020.

“AI is really good at taking these kinds of tests,” Blake notes. “Just copy paste all the questions into ChatGPT and you’ll pass in a heartbeat.”

The consequences were light: formal warnings for most, one verbal caution, and one person who left months later. The firm didn’t report the incident to regulators.

“They got fined $50 million for it before and then they just continued to do it,” David points out. “So the fines don’t work, obviously.”

The PCAOB is now warning it will closely scrutinize AI use in accounting firms. They’re particularly concerned about private equity-backed firms, fearing pressure for short-term results will compromise audit quality when combined with AI automation.

The Death of the Billable Hour

Beyond scandals, AI is reshaping how accounting firms operate and charge for their services. The billable hour, introduced in the early 1900s as a management tool and dominant since the 1960s, faces extinction.

“When AI can review thousands of contracts in minutes instead of weeks, charging for time spent becomes economically absurd,” writes Rita McGrath of Columbia Business School in the Wall Street Journal.

Blake experienced this transformation firsthand as a freelance bookkeeper. “I billed hourly for keying transactions into accounting software. I then figured out how to automate 90% of it. I had a choice: bill 80-90% fewer hours and lose all my revenue, or switch my clients to fixed fees and take ownership of the process.”

The efficiency gains are already here. Ramp has AI approvals handling 80-90% of transactions automatically. Xero’s new auto-reconcile feature uses AI to match transactions with high confidence. According to OpenAI’s survey of 9,000 workers, employees save an average of one hour daily using AI, with heavy users saving ten hours weekly.

But not every company succeeds at this transition. Pilot raised $118 million at a $1.2 billion valuation, betting it could automate bookkeeping and achieve software margins. Today, they have just 2,500 clients and recently launched a partner program to offload the labor they couldn’t eliminate.

“The fact that they’ve launched a partner program indicates they’re trying to push labor costs out of the company so they can be a software company,” Blake observes.

The irony isn’t lost on David. “They have this headline, ‘Tired of endless QuickBooks updates breaking your workflow.’ But the very first app they list in their integrations is QuickBooks. It’s built on QuickBooks.”

AI Writing Reports Nobody Trusts

Companies are racing to use AI for financial reporting even while harboring deep doubts about its reliability. Twenty-eight percent of financial executives already use generative AI for external reporting. ON Semiconductor’s AI writes entire sections of management discussion and analysis. Hewlett Packard Enterprise plans to use AI for first drafts of financial statements starting in January.

“Take financial statements, drop them into ChatGPT and ask for the narrative. It does a spectacular job,” Blake says. “Taking numbers and turning them into a story that non-accountants can understand, highlighting what’s important, it’s really good at that.”

Yet Harvard Business Review’s survey of 603 business leaders shows only 6% of companies trust AI for core business processes. Most limit AI to low-risk or supervised tasks.

“The work accountants do requires near 100% accuracy,” Blake explains. “Research shows AI achieves 80% accuracy at 30-minute tasks but 100% only for tasks taking a few minutes.”

Meanwhile, Meta’s creative accounting for its Hyperion data center—using complex structures to keep it off-balance sheet—shows human financial engineering still outpaces AI. As the Wall Street Journal called it, “Artificial intelligence, meet artificial accounting.”

What Comes Next

Interesting research is challenging assumptions about what drives audit quality. Studies show offices with less competition deliver better audits with fewer errors. “Competition pushes down fees, which incentivizes auditors to cut corners,” Blake explains.

Another study found audit teams with more women deliver higher quality at lower fees, but only in supportive environments with good work-life balance and female partners.

President Trump, meanwhile, claims tariff revenue will eliminate income tax entirely. “We’ve taken in literally trillions of dollars,” he stated, though actual tariff revenue was only $258 billion last year versus $2.7 trillion from income taxes.

“Doesn’t anybody prep him?” David wonders. “He just makes up numbers.”

The accounting profession is at a crossroads. Will accountants become the quality control layer ensuring AI meets professional standards? Or will they cling to outdated models until technology makes them irrelevant?

To hear Blake and David’s full discussion, including details about the new Trump IRA accounts for kids and Senator Jim Justice’s $5 million tax settlement, listen to episode 465 of The Accounting Podcast.

Your Excel Data Never Leaves Your Computer With This AI Automation Method

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While 58% of professionals have tried AI, only 17% use it regularly. Kyle Ashcraft sees opportunity in that gap.

In episode 108 of the Earmark Podcast, host Blake Oliver sits down with Kyle, a CPA who built Maxwell CPA Review and helped over 1,500 students pass their exams, for a live demonstration that might change how you think about Excel automation. Their conversation shows how any accounting professional can start automating their work in under an hour. No coding experience required.

The AI Gap Nobody’s Talking About

“The more advanced AI becomes, we can take one of two directions,” Kyle explains during the demonstration. “You can continually veer away from it, and the more that comes out, you step farther and farther away from it. Or you can make it a goal to learn, let’s say, one new tool a week.”

The problem isn’t that accountants don’t want to use AI. It’s that they don’t have dependable strategies for implementing it. Kyle describes the typical approach as, “Opening up ChatGPT, throwing in a spreadsheet, and then giving it a prompt and seeing what it comes up with. Sometimes like a Hail Mary, where you just want to see if it gives you an acceptable output.”

There are two major issues with this approach. First, it often takes multiple attempts to get the output you want because ChatGPT can’t read your mind. Second, and this is crucial for accountants, when you upload a spreadsheet to ChatGPT, “your Excel document is going directly to OpenAI. Your prompt is going to them, and the prompt that they output to you is going to them as well.”

This matters because OpenAI’s data retention practices are questionable at best. They’re currently in a lawsuit with The New York Times and required to permanently retain logs. No wonder 70% of accounting professionals cite data security as their primary concern with AI adoption.

Enter “Vibe Coding”: When Everyone Becomes a Developer

Kyle’s journey started with a challenge. Could someone with zero coding experience build something that traditionally required a development team?

Four months later, he had his answer. Using Cursor, ChatGPT, and Claude, he built a complete assessment platform that identifies students’ weakest areas, emails follow-up practice materials, and provides analytics dashboards for professors. All with no programming background whatsoever.

“This really shows it’s possible to not have any idea what the code itself is saying, but with clear communication and patience, you can accomplish things that would have been impossible just two years ago,” Kyle tells Blake.

This phenomenon has a name: vibe coding. It’s coding without being a coder, using everyday language to generate complex scripts. During the demonstration, Kyle shows how Cursor generates hundreds of lines of Python code based on simple English instructions. You don’t need to understand what those lines mean, you just need to know what you want to accomplish.

Kyle offers a metaphor that reframes the entire relationship with AI. “Picture it like an orchestra and a conductor. You’re the conductor. You are in control. You set the tempo. You set the vision of what you want to achieve. And it’s the orchestra that’s doing all of the hard work.”

“There’s this assumption that AI is going to eliminate a lot of work,” Blake observes. “But what we find in reality is that it shifts the work from doing to reviewing. So that job is not going away, but now we review the output and provide feedback.”

The Script Solution: Privacy and Reliability in One Package

During a live Q&A, one attendee asks the question on everyone’s mind: “When you load the project into Cursor and it shows you the Excel files, does this AI platform not retain that client data? How is this different than uploading the Excel into ChatGPT?”

Kyle’s answer reveals why scripts are game-changing for accounting work. “It does not retain this data because with this process, it created this Python script, which is just Python code. It’s offline. There’s no record of this script.”

Your Excel data never leaves your computer. Instead, AI creates a script—basically a recipe—that runs locally on your machine. Think of it this way: instead of handing your sensitive client data directly to an AI company, you’re asking AI to write you instructions. The AI writes the instructions based on your request, but it never sees your actual data.

Blake highlights another advantage: “When Cursor communicates with AI services like Claude, it does so through APIs that have zero data retention policies. That’s in stark contrast to the chat interfaces most people use.” As he explains, these companies want large enterprises to be comfortable, so API interactions have much stricter privacy protections.

But privacy is only half the equation. Scripts also solve the reliability problem. Blake shares a cautionary tale about a Big Four firm in Australia that had to refund a government contract because its AI-invented citations didn’t exist. “They send an entire report to the government, the government clicks on the links for it, and they don’t exist. It’s disastrous if you don’t actually review the output.”

When another attendee asks about the risk of hallucinations, Kyle explains why scripts are different: “You’re not having an AI model interact with the Excel information. You’re having this step-by-step script that says, ‘do an auto sum of column B.” The script uses Excel’s own functions, it just automates the clicking and typing you’d normally do manually.

This deterministic nature means the same script produces the same result every time. As Blake notes, “We can reuse the script we created, apply it to a new Excel file and get the same expected result without having to check everything over again.”

The Three-Part Formula That Makes It All Work

“Goal. Steps. Output.” With these three words, Kyle unlocks the secret to making AI do exactly what you want.

During the demonstration, he tackles three real-world Excel challenges that every accountant faces. First up: a messy data export with empty rows, headers in row three, 14 different date formats, and inconsistent spacing.

His prompt is elegantly simple:

  • Goal: Clean up this Excel file
  • Steps: Identify any inconsistent formatting. Add basic color and style. Analyze each column to better understand its format
  • Output: A new Excel document

Within moments, Cursor generates hundreds of lines of code. The result is a perfectly formatted table with consistent dates, proper headers, and professional styling. “It looks clean, smooth, with some nice shading,” Kyle observes. “It’s just easier to look at overall.”

When Blake asks whether Cursor can do its own checksum, they quickly add both files and ask Cursor to verify nothing was lost. The response: “All 20 transactions are present. All amounts were correctly processed. The sum of $19,000 is maintained.”

The second demonstration scales up the complexity. Kyle shows a General Ledger detail export with 400 rows spanning every account. Manually organizing this would require hours of filtering and copying. His structured prompt creates a summary tab showing account codes, transaction counts, debits, credits, and net amounts, plus individual tabs for each account’s detailed transactions.

“Instead of going to each account in your accounting system and exporting the GL individually, just export all the accounts together and then run this through,” Kyle suggests. What might take an hour completes in under a minute.

The third example addresses bank reconciliation, comparing statements to GL detail to find discrepancies. No more scrolling row by row. The automation identifies matching items, missing transactions, and differences between the files instantly.

Blake connects the dots for viewers. “I picture our listeners who work with some older ERP systems that don’t have very customizable reporting and who are doing a lot of manual formatting. Now you can automate that recurring task every month or every week.”

Getting Started Is Simpler Than You Think

The transformation begins with two downloads that take five minutes each. First, download Python, then download Cursor. Start with the free tier. Kyle uses the $20 monthly plan for daily use, but the free version is powerful enough to begin.

When you first open Cursor, it will ask you to install some packages like “pandas” for Excel interaction. Kyle recommends, “Click the dropdown button and choose ‘run everything’ so you trust the platform. It’s very reliable, and then anytime it needs a new required package, it automatically downloads that.”

Don’t forget to adjust your privacy settings. In Cursor’s settings menu, scroll to privacy options and select “privacy mode” with “no training data used.” This ensures your work isn’t incorporated into AI training datasets.

The key to success is to start small and be patient. “Try it with some information that is not private at all, maybe one of your own documents,” Kyle suggests. “The more patience I have, the more I follow up on that review step by giving it tiny pieces of feedback, the more it improves over time.”

Blake adds perspective on managing expectations: “When I try new tech, 80% of what I do doesn’t have a payoff, but then the 20% has a huge payoff. So don’t get discouraged if your first few attempts fail.”

For recurring tasks, the payoff compounds quickly. “Private roles always have month-end closing. Public end clients always need amortization and depreciation schedules for their notes,” Kyle notes. Even creating client checklists based on prior year information becomes a candidate for automation.

The Bottom Line: Your Move

The tools are accessible. The knowledge is available. As Kyle demonstrated with live examples, you can go from messy data to polished reports in minutes using nothing more than clear English instructions.

So, will you step away from AI as it advances, or learn one new tool at a time and stay connected to this movement? Because as Kyle reminds us, “It’s not going to go away. It’s just going to become more integrated into everyday work culture.”

To hear these demonstrations in action, listen to the full episode at podcast.earmarkcpe.com/108. Kyle has also offered to help early adopters, so reach out to him at kyle@maxwellcpa.com with questions or to brainstorm how this could apply to your specific work situation.

As Kyle challenges at the session’s close, “Try your first task with it this week and see how it works for you.” The revolution in accounting work is here, waiting for those bold enough to embrace it.

This CPA Firm Grew to $1 Million by Saying No to Most Clients

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When Nick Liguori, CPA started his accounting firm at the beginning of 2020, he had modest goals. “I figured if I can add a few more clients and build it up a little bit, that would work fine,” he tells Rachel Dillon, host of Who’s Really the Boss? podcast. “I’d hopefully make enough money to pay the mortgage and make ends meet.”

Five years later, his New Hampshire-based firm, Liguori Accounting, has seven employees and just under $1 million in annual revenue. The transformation didn’t come from working longer hours or taking on every client who walked through the door. Instead, Nick discovered the power of focusing on one specific industry: medical aesthetics and med spas.

From Side Hustle to Specialized Practice

Nick’s path to firm ownership wasn’t typical. After starting his career at a mid-size regional firm and then moving to a smaller practice focused on small businesses, he spent time in industry working for a publicly traded company. During those corporate years, he began taking on tax and bookkeeping clients on the side.

“After a little while of doing that, it got to the point where I couldn’t balance both things anymore,” Nick explains. He made the leap to full-time practice right as 2020 began, just before the pandemic changed everything. In some ways, the timing worked in his favor. “I was setting everything up virtually and remote anyway,” he says. “So COVID-19 obviously forced that on everybody. In some ways I got a little bit of a head start.”

For over a year, Nick worked solo. Then, about two years in, a referral changed everything. A local med spa needed help with outsourced accounting, tax, and advisory work. The fit was perfect.

Discovering the Perfect Niche

“A lot of the med spa owners that we work with are obviously medical professionals. That’s their area of expertise,” Nick explains. “But they’re not necessarily financially minded or that’s not their strength. So we provide a lot of value there, helping them navigate the financial aspect of their business.”

That first med spa client led to referrals, which led to more referrals. The firm got involved with local associations. “That was the first stepping stone into taking it to a much bigger audience—more med spas across the country,” Nick says.

Two years ago, the firm decided to focus exclusively on med spas. It wasn’t easy. “We had an existing client base that were not all med spas,” Nick admits. “So it was a little scary to say, okay, now we’re only going to focus on med spas.”

The transition meant letting go of clients who no longer fit. “We’ve definitely lost a lot of those clients. Some have just churned out naturally and some we’ve let go because they really weren’t a good fit for the services we provide now.” But Nick sees it as progress. “Each year when I look back, we’re a step forward in the right direction.”

Marketing Where Your Clients Already Are

Once the firm committed to the med spa niche, marketing became much more targeted and measurable. “What’s been most successful is getting in the industry spaces where the owners are hanging out,” Nick says.

Conferences became a primary strategy, though the investment felt risky at first. “Getting into it for the first time was a little bit scary because it’s a big investment,” Nick admits. Conference booths typically cost between $3,000 and $5,000, with some running as high as $10,000.

But the returns justified the expense. “We went to one last November and came away with two or three new clients,” Nick reports. “When you think about it from an ROI standpoint, if you’re getting a monthly client for an event that costs you $5,000, it pays for itself.”

Beyond conferences, the firm appears on industry podcasts and webinars targeted at med spa owners. They work with the New Hampshire Association for med spas, which started just a few years ago. “We’ve worked with them from the beginning,” Nick says. “There’s a much lower cost of entry when it’s local.”

The firm now focuses on getting speaking opportunities at conferences rather than just booth space. “That’s where you get the most exposure and probably the best opportunities,” Nick explains. “People can come and go. And depending on where you’re set up in the conference center, you may not get great activity.”

Building Systems That Scale

Specializing in one industry created unexpected operational benefits. “Once you learn a few med spa clients, now you sort of know where the potential issues lie,” Nick says. “It’s probably inventory. Are their sales broken out properly? Is there equipment broken out on the balance sheet? We know where the problems tend to be.”

This predictability transformed their onboarding process. What originally had no timeline became a 60-day process, then shortened to just 30 days. The firm built templates in Keeper (now Double), its practice management software, sends comprehensive checklists to clients, and schedules three strategic meetings throughout the onboarding period.

“We always try to schedule the next meeting before the end of the current meeting,” Nick shares. “So it’s on the calendar. They’ve committed to a time that works in their schedule.”

The firm adopted the Team of Three structure about a year ago. With three bookkeepers, two managers, and Nick as the CFO, everyone has clear responsibilities. “There’s no confusion,” Nick says. “Everyone knows what they’re responsible for.”

Training new team members became easier too. “Once you’ve worked on this client, the next client is going to be very similar,” Nick explains. The firm relies on shadowing and screen recordings for training. As Rachel notes, “When people are limited on capacity or availability, shadowing is always great. We just always try to record.”

The Price of Expertise

Perhaps the most dramatic change has been in pricing. “My original packages were $200 a month for bookkeeping and $500 for CFO support,” Nick recalls. Today, the firm offers three tiers:

  • Bronze (bookkeeping only): $800/month
  • Silver (bookkeeping + quarterly tax planning/CFO): $1,200-1,500/month
  • Gold (bookkeeping + monthly tax planning/CFO): $2,000+/month

Most clients choose the silver tier. “That’s where we have the most interest, especially with med spas, because that tax planning piece is really beneficial,” Nick explains.

The firm also charges substantial onboarding fees: $3,000 for bronze tier, $5,000 for silver or gold. When prospects push back, they might offer to split the fee into two or three payments, but rarely discount.

Higher prices actually improved client quality. “You avoid some of the clients that are just price shopping and really don’t value what you’re doing,” Nick notes. The clients who seek out industry specialists understand they’re paying for expertise.

Lessons from the Journey

Looking back, Nick wishes he’d been more intentional from the start. “I started my firm without a big picture plan in mind,” he admits. “I wish I had set up processes, set up our service offerings at the beginning before starting, rather than trying to figure it out on the fly.”

Pricing confidence took time to develop. “We really didn’t get our pricing to a place that was solid for probably a couple of years,” Nick says. “Knowing the value you provide and being confident as you’re selling—that was a big thing for me.”

The past year has been one of regrouping after team and client transitions. “We’ve put a lot of effort into building the team, getting our processes down really well, and streamlining onboarding,” Nick explains. “We’re doing our best to set ourselves up for that next phase of growth.”

Working with an advisor through Collective by DBA has helped navigate these changes. “Having that sounding board and someone who has seen a lot of different firms at a lot of different stages has given us a really good perspective,” Nick shares. “It’s easy to feel a little bit isolated, especially with these bigger picture decisions.”

The Power of Focus

Nick’s journey demonstrates that specialization doesn’t limit opportunity—it creates it. By focusing exclusively on med spas, his firm can:

  • Market directly to a defined audience with measurable ROI
  • Onboard clients in half the time it used to take
  • Train team members more efficiently
  • Command premium pricing for specialized expertise
  • Better plan capacity

“Having that industry focus makes it a lot easier to say no to the clients that are not ideal,” Nick says. “And a lot easier to identify clients that are going to be a good fit.”

For accounting professionals considering specialization, Nick’s advice echoes what his father taught him in the family conveyor belt business: “Measure twice, cut once.” Think through the decision from multiple angles. Research your chosen niche thoroughly. But once you commit, the benefits compound with each new client you serve.

The firm now limits itself to onboarding just two new clients per month—not because they can’t handle more, but because they know exactly what it takes to deliver exceptional service. That’s the confidence that comes from knowing your niche inside and out.

Want to hear more about Nick’s journey and get detailed insights into building a specialized accounting practice? Listen to the full episode of Who’s Really the Boss?, where Rachel and Nick dive deeper into the specific strategies, challenges, and victories of transitioning from generalist to specialist.

Rachel and Marcus Dillon, CPA, own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, Collective by DBA, supports and guides accounting firm owners and leaders with firm resources, education, and operational strategy through community, groups, and one-on-one advisory.

When 37,000 Japanese Investors Discovered Their Dividends Were Now “Divine”

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Picture opening your quarterly dividend envelope in February 2007, expecting yen, one of the world’s most stable currencies, but instead finding paper vouchers denominated in “Enten,” which literally means “divine money” in Japanese. These heavenly tokens were only good in one man’s bizarre marketplace where you could buy bedding, socks, and produce, but definitely couldn’t pay your rent.

This actually happened to 37,000 Japanese investors who discovered their life savings had been converted into monopoly money.

In the latest Oh My Fraud episode, “Divine Yen, Devilish Fraud,” host Caleb Newquist unpacks one of Japan’s most absurd financial frauds. The story of Kazutsugi Nami and his Ladies & Gentleman company—yes, that was the actual name—offers critical lessons for accounting professionals in a time of growing cryptocurrency schemes.

A Career Built on Fraud

You might think a fraud conviction would end someone’s career in finance. Kazutsugi proved otherwise, repeatedly.

His criminal timeline reads like a fraudster’s greatest hits. In the 1970s, as vice president of APO Japan, he helped market fake exhaust gas removers through a pyramid scheme. The devices didn’t work, but 250,000 people bought in before the company went bankrupt and authorities came knocking.

Most people would have learned their lesson. Not Kazutsugi.

By 1973, he’d already founded Nozakku Co., selling “magic stones” that supposedly purified tap water. The timing was perfect, as Japan faced severe water contamination from rapid industrialization, and desperate people wanted solutions. At its peak, Nozakku pulled in roughly ¥2 billion annually (about $6-8 million in late 1970s dollars). The stones weren’t magic. They didn’t purify anything. By 1978, Kazutsugi was in prison for fraud.

In a move that should make every accounting professional pause, in 1987, while his fraud record was still fresh, Kazutsugi founded Ladies & Gentleman (L&G). Eventually, 37,000 investors would hand over billions of yen to a convicted fraudster. One victim later justified their investment because L&G had been “in business for a long time.”

The bizarre culmination came on February 4, 2009, when police arrived to arrest him. Instead of hiding, Kazutsugi held court at a restaurant, charging reporters ¥10,000 each to attend his breakfast press conference while he sipped beer at 5:30 AM. He’d even packed spare underwear, expecting the arrest.

When asked about defrauding investors, his response was pure theater. “Do you think I could behave openly like this if there had been a fraud?” Later, he added, “Time will tell if I’m a con man or a swindler.”

The Divine Currency Revolution That Wasn’t

Kazutsugi didn’t just promise returns; he promised revolution. He called Enten the future of money, a currency that would break free from Japan’s economic system. He claimed governments would eventually adopt it and that he had a divine decree to eliminate poverty worldwide.

At investor events that resembled religious revivals, Kazutsugi styled himself as a modern-day Oda Nobunaga, one of Japan’s great historical figures, who unified Japan through military conquest in the 16th century.

The 36% annual returns Kazutsugi promised should have been an immediate red flag. In 2007, when Japanese government bonds yielded around 1.5%, 36% guaranteed returns defied financial gravity. Yet thousands of investors, many elderly and seeking retirement security, handed over their savings.

The scheme’s genius was its gradual escalation. Initially, L&G paid dividends in real yen, establishing trust. Then in early 2007, dividends became partially Enten. Finally, they were paid entirely in this imaginary currency that could only be spent in L&G’s internal marketplace, essentially a curated flea market offering comforters, vitamins, and produce.

As Caleb observes in the episode, these are exactly the products “multi-level marketing companies love because you can just claim it’s enhanced by whatever mystical bullshit you are selling that year.”

When Vision Meets Delusion

During the episode, Caleb and producer Zach Frank explore fascinating parallels between cult leaders and modern tech CEOs. Both sell transcendent visions that attract devoted followers.

“They see themselves as right. They’re cocky, they know the way, and they’re the only ones who know the way,” Zach observes.

This absolute certainty becomes magnetic. Caleb notes how Elon Musk, before his political involvement exposed his character. “He had this vision for the world. We’re going to Mars and we’re going to save the world. And people are like, yeah, I’ll follow you anywhere.”

Zach offers crucial insight about why these figures gain traction. “We’re in a time where gurus are becoming more popular than ever. It has to do with the lack of trust in institutions and science in general. People want to find someone to give them the answers to everything.”

When traditional systems seem to be failing, like during the 2007-2008 financial crisis when L&G was collapsing, the person who claims to have all the answers becomes irresistibly attractive.

The Spectacular Collapse

When L&G announced dividends would only be paid in Enten—no more real yen—investors understandably panicked. Some wanted to know whether they could exchange Enten for things like rent and food. They could not.

Like a classic bank run, investors crowded outside L&G locations demanding money and answers. The Japanese press pounced on the story. In November 2007, L&G filed for bankruptcy with estimated losses between ¥126 billion to ¥226 billion (roughly $1-2 billion USD). It was rumored to be Japan’s largest consumer investment fraud ever.

Even as police led him away, Kazutsugi insisted, “I am the poorest victim. Nobody lost more than I did.”

In March 2010, Kazutsugi was sentenced to 18 years in prison, a harsh sentence by Japanese standards. Even then, he insisted Enten was the future.

Lessons for the Profession

For accounting professionals, these patterns translate into specific warning signs:

  • Gradual shifts in payment methods that move from standard to non-standard practices
  • Closed ecosystems where value can only be realized within the company’s control
  • Recruitment-based growth models dressed up as community building
  • Attacks on regulators rather than substantive responses to concerns
  • Appeals to revolution that discourage traditional due diligence
  • Impossible guaranteed returns justified by proprietary methods

Distinguishing between legitimate innovation and sophisticated fraud requires more than technical knowledge; it requires understanding the psychology of persuasion.

Real innovations might disrupt industries, but they don’t violate mathematical laws. A 36% guaranteed return isn’t innovation; it’s impossibility. A currency that only works in one company’s marketplace is company scrip, a practice outlawed in most developed nations for good reason.

As Caleb warns, “If someone promises you a 36% annual return, but that return comes back to you in tokens that are only good for bedsheets, fruits, and the occasional pressure cooker, you are not diversifying your portfolio. You are subsidizing a cult with slightly better stationery.”

Listen to the full Oh My Fraud episode to hear the complete breakdown of this bizarre case, including more details about the victims and the reasons smart people fall for obvious frauds. The episode offers insights that connect historical frauds to modern schemes and the psychological vulnerabilities that transcend cultures and currencies.

Whether it’s cryptocurrency, NFTs, or the next financial revolution, the pattern persists: charismatic leaders promising transformation, impossible returns dressed as innovation, and schemes that create confusion where clarity is desperately needed. Our role as accounting professionals is to ensure that when someone claims to be building the future, they’re working with real materials, not divine intervention.

The Week Accounting Lost Its Professional Status and Dating Apps Became Job Sites

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After 128 years as licensed professionals, accountants just got told they’re not in the same league as doctors and lawyers—at least according to the Department of Education. In this episode of The Accounting Podcast, hosts Blake Oliver and David Leary dig into what this means for the profession, along with news about AI taking over audits, big firms making embarrassing mistakes, and job seekers using dating apps to find work.

The Professional Status Problem

The Department of Education wants to strip accounting of its professional degree status, which would slash federal loan limits from $50,000 to $20,500 per year starting in 2026. This hits graduate accounting programs hard, especially when states are already rethinking the 150-hour CPA requirement.

The proposal came from the One Big Beautiful Bill Act, but as David points out, Congress didn’t actually specify which professions should qualify. “Isn’t Trump supposed to get rid of the deep state where these government agencies just make up the rules?” David asks. Instead, bureaucrats decided that medicine, dentistry, and law are professional programs, but accounting, nursing, architecture, and education aren’t.

AICPA President and CEO Mark Koziel calls this lack of recognition “common sense” to oppose, while NASBA President Daniel Dustin reminds everyone that CPAs have been licensed professionals since 1896—longer than many professions that made the cut.

During the livestream, one viewer made an interesting point: “If we are no longer professionals, that means we are entitled to overtime.” Blake expanded on this, noting that the Fair Labor Standards Act exempts professionals from overtime. Without that professional designation, Big Four firms might suddenly face huge labor costs for all those 50-60 hour weeks their CPAs work.

Students already questioning whether becoming a CPA is worth it will think twice when federal loan support drops by more than half.

AI Is Coming Fast, But Not Always Successfully

While regulators debate whether accountants are professionals, tech companies are betting billions on replacing them with AI. PwC announced it will have “full end-to-end AI automation for audits by 2026.” That’s not some far-off dream; they’re already using tools that auto-populate audit planning documents and analyze walkthroughs.

But the AI revolution has had some embarrassing failures. Deloitte produced a $1.6 million healthcare report for the Canadian government that included completely made-up academic citations. One fake paper was titled “The Cost Effectiveness of Local Recruitment and Retention Strategies for Health Workers in Canada,” which doesn’t exist. This came after a similar mess in Australia with over 20 fake citations.

“Deloitte’s website markets its AI and data teams,” David notes. “Deloitte should hire that team before they do any more AI work with clients.” The irony is that Deloitte sells itself as the company that helps others avoid exactly these AI mistakes.

Meanwhile, EY’s new leader Dante D’Egidio got promoted after cutting their audit deficiency rate from 46% to 9%. How? They fired clients, built support teams, and invested in technology. As Blake explains, “EY had too many clients and their staff and managers and partners were overworked. Quality went down.”

The OpenAI connection to accounting firms gets even stranger. OpenAI is investing in Thrive Capital, which owns Crete Professionals Alliance, a company that buys accounting firms and forces them to use AI technology. OpenAI will even send teams to work inside these firms. “This would be like Intuit buying accounting firms and making them buy QuickBooks,” David says. “People would lose their minds if that happened.”

The Job Market Reality Check

The economic news isn’t great. Small businesses lost 120,000 jobs in November while large companies only added 39,000. Three in ten companies plan to lay people off during the holidays. Americans are planning to spend $73 less on holiday shopping this year.

But there’s useful advice for job seekers. According to data Blake shared, 54% of workers got their current job through personal connections, while only 13% succeeded through job boards. Yet 60% of job seekers don’t use their network at all, mainly due to lack of confidence.

Here’s where it gets interesting: one-third of dating app users are now swiping for jobs, not dates. And it works: 88% made professional connections and 37% got job offers. “LinkedIn is the red water,” David observes. “You can’t stand out there. But if you say on a dating site, ‘Hey, I’m looking for a job,’ there’s nobody competing for jobs there.”

What’s Actually Changing

Beyond the headlines, several big shifts are happening. Xero is raising prices on developers specifically to stop AI models from accessing data. They’re banning developers from using their API to train machine learning models, the same thing Intuit did with QuickBooks.

Speaking of Intuit, the company now shares small business data with The Trade Desk, one of the world’s largest advertising networks. This lets advertisers target small businesses using QuickBooks data. “Your small business client data is now being sold to third party advertising networks,” David warns.

The Department of Government Efficiency (DOGE) quietly disbanded after cutting 300,000 government positions. They haven’t posted anything new since early October, and David suspects “Republicans are cutting away some of this bad press stuff.”

Looking Ahead

The hosts make some predictions for the coming year. David expects a partnership between OpenAI and the AICPA or CPA Academy by 2026 because “there’s just too much money” in CPE and they’re going to go after some of it. He also shared advice for young people: make a podcast interviewing professionals in your desired field. “If you’re in high school and want to become a dentist, make a podcast where you interview dentists. Even if nobody listens to your podcast, when you’re all said and done, you’ll know 40 dentists. And when you finish school, you probably have a good chance of getting a job.”

The accounting profession faces real challenges, from regulatory dismissal to AI automation to economic headwinds. But as Blake and David demonstrate each week, staying informed and adapting creatively matters more than protecting old definitions of professionalism.

Want to hear the full discussion, including details about PCAOB changes, tariff impacts, and why accounting firms might have to start paying overtime? Listen to the complete episode of The Accounting Podcast. You can even earn free CPE through the Earmark app while you listen.