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This is a public newsletter announcement to inform you that OTM will resume its regular weekly cadence from now through the end of July. The hiatus will resume for the month of August, and end in September when OTM will continue, I’m told, indefinitely, and I am not allowed to have another child during my tenure at Gusto. It’s nice to be needed, I guess.

And now, the newsletter.

Essential-ish workers

You really can’t say enough about front-line workers and the jobs they’re doing. Health care workers and first responders are taking care of the sick and saving lives. Workers up and down the food supply chain are putting themselves at risk to make sure the rest of us can survive at home. Meanwhile, the rest of us are working at home—some alone and some with families—but regardless, there’s been a lot of thinking time. And all that thinking has caused many of us to go down the road of WHAT AM I DOING WITH MY LIFE?

Workers not on the coronavirus front lines haven’t faced the same health risks as those in crisis-critical jobs. But many people who are crafting marketing plans, processing invoices and otherwise toiling from home are confronting existential questions about the meaning of their work amid a world in turmoil.

The professional network Blind conducted a survey for The Wall Street Journal in May, and found that 26.7% of nearly 2,000 respondents agreed with the statement, “I’m not considered essential or don’t think I am, but I’m still working. My work doesn’t feel particularly important or meaningful.”

Funny, when I read “crafting marketing plans” all I see is: “writing an occasionally amusing newsletter,” and now I’m in a metaphysical spiral that I may not pull out of.

Just kidding. I always pull out of my metaphysical spirals. (So far.) The point, my friends, is many people are confronting these kinds of feelings for the very first time, and, yeah, they’re not always good feelings.

Are any accountants experiencing this professional existential doubt? I don’t know, you can tell me, but we talked before about how accountants don’t save lives necessarily but instead save livelihoods, which is not an insignificant service. As businesses’ economic fortunes have deteriorated, so too have the fortunes of their owners, employees, and customers. Accountants who have been able to assist those businesses—through securing PPP loans, other financing, or simply navigating the day-to-day—have quickly become essential to all of those stakeholders.

And when you think about how many businesses aren’t working with accountants (about half, as of 2018), you suddenly realize, just how many continue to be vulnerable. If the economic recovery is going to stand a chance, it seems that accountants will have to be an essential part of it.

Accounting fraud

It goes without saying, but it’s a harrowing time in history right now. There’s a worldwide plague, civil unrest, economic ruin, and there’s no telling what might come next. If you, like most of us, are finding this all overwhelming, you can rest easy knowing that some things—namely, massive corporate accounting frauds—haven’t changed much at all:

Wirecard has for the first time acknowledged the potential scale of a multiyear accounting fraud, as the German fintech group warned that €1.9 [billion] of cash on its balance sheet probably does “not exist.”

The payments company said it had previously [mischaracterized] its biggest source of profits and that it was now trying to work out “whether, in which manner and to what extent such business has actually been conducted for the benefit of the company.” It withdrew its most recent financial results and said other years’ accounts may be inaccurate.

Yes, the good ol’
 corporate accounting scandal is alive and well, and for my money there’s nothing quite like a non-existent-cash-via-phony-revenue scam.

What makes the Wirecard story extra fun is that the Financial Times has been reporting on the shifty business there for 18 months, and the company vehemently denied any wrongdoing, going so far as to accuse the FT reporter of conspiring with short sellers. BaFin, the German financial regulator, even filed a criminal complaint against the FT and some short sellers, and banned anyone from shorting the stock for two months.

The whole thing unraveled, somewhat surprisingly, thanks to a special audit by KPMG that “was unable to verify the arrangements were genuine.” The regulator has egg on its face, Wirecard has filed for insolvency, its CEO has resigned in disgrace—and been arrested. And some accountants played a positive role in it!

Oddly, the whole episode almost gives you some hope.

Fresh from Gusto

  • Gusto now offers an employee sync integration with Shopify. Have your clients connect your Gusto and Shopify accounts here in the Shopify App Store. And leave your feedback!
  • In a new blog post, our co-founder and Chief Product Officer Tomer London and Chief Operating Officer Lexi Reese explain how Gusto’s new hiring and onboarding tools make it easy to automate and send customized offer letters, e-sign key documents, set up software for new employees, and more, all before a new hire’s first day. Check out the post to learn more and keep your clients informed about these new features.
  • ANCUR, Inc. CEO DeVan Curry has everything self-employed folks need to know about the Paycheck Protection Program.
  • If all the recent PPP changes have been making your head spin, this post will catch you up.

Web learnin’

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Caleb Newquist Caleb is Editor-at-Large at Gusto. In 2009, he became the founding editor of Going Concern, the one-of-a-kind voice on the accounting profession, serving in the role for 9 years. Prior to Going Concern, Caleb worked as a CPA for nearly 6 years in New York and Denver. He lives in Denver with his wife, two daughters, and two cats.
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