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The following statement is going to ruffle some feathers, but here we go: Work-life balance is a myth. As productivity guru, David Allen, once said: “You can do anything, but not everything.”
If you’re in the early stages of your career, you’ll likely choose one of two paths:
1. Overworked. You choose to focus on your career by working long hours and gaining as many skills, experiences and professional contacts as you can. You’ll feel overworked at times, but that diligence will hopefully pay off down the road. By working your tail off and acquiring some battle scars early on, you’ll eventually have great skills, contacts and hopefully a decent bankroll. At this point, you’ll have a wide variety of options about what you want to do next.
2. Overlived. You choose to take advantage of your freedom, good health and youth. You want to enjoy yourself, pursue your passions and take in as many life experiences as possible before “settling down” into career and family life. Money may be tight, but you’ll have a lifetime of memories, and a robust social media feed. Great. But that could lead you to approaching the next stage in your life/career with noticeably fewer career skills and work experiences.
Which camp is the right camp? This is totally up to you.
I know this may sound stark, because most young people will tell you they want a balance between paying their dues at work and enjoying life. But fast forward 10 years and they almost never find the balance they hoped for. Ask any successful person who claims to have great work-life balance and they’ll tell you about how hard they worked as a young professional, how tough their bosses were, how many red-eye flights they endured flying coach and how much adversity they had to overcome. They have flexibility that seems attractive now because they have already put in the hard work. Now they can reap the rewards of their early sacrifices. To borrow a sports analogy: You have to do the reps; you have to do the work if you want to make gains.
Another way to look at the overworked vs. overlived dilemma is to ask yourself what kind of a team do you want to be on at this stage of your life?
Do you want to be on a Super Bowl champion like the Kansas City Chiefs or do you want to be on a fun-loving cellar-dweller like the Texas State Fighting Armadillos from the 1991 movie Necessary Roughness. That team partied all the time, had no scholarship players, and relied on a 40-year-old has-been quarterback to lead them.
If you’re a young person starting your career, you’re not pursuing a job as much as you’re choosing a team. Some of the teams “recruiting” you will stress their culture: “We have flexible hours. Everyone’s really nice. The pay is decent. We have pizza every Friday and fun team-building exercises,” they’ll tell you. “Sure, we get some work done, but it’s really about balance and having a good time,” they’ll add. Think Michael Scott and the fictional Dunder Mifflin paper company from The Office.
But other teams, like the high-performing ones, will tell you straight off the bat that you’re going to work long hours, and you won’t get to work from home or choose which days you get off. They also won’t sugarcoat how stressful work will be at times. Their expectation is that stress within reason can be a good tool for leveraging better performance.
So why would you want to join a team like that?
Because those teams are at the top of the profession. Their culture is about everyone growing and pursuing excellence. It won’t be as much fun on this team, but after a few years, you’ll have incredible skills and experience to put on your resume and an enormous network of contacts who can help you throughout your career. Many members of the New England Patriots championship dynasty didn’t love playing for Coach Bill Belichick, but they sure loved the bonus money and the Super Bowl trophies.
Here’s the key: If you don’t want to practice hard, and you don’t care about winning games or championships and you aren’t passionate about getting better, then pick the easier, fun-loving team. There’s nothing wrong with that. But when you look back 10 years from now, which team will you say you wish you were on?
The really nice team, with the calm, relaxing, supportive environment may not have had high expectations, but the stress level was low and you’ll have made good friends there. But how many games did you win? The other team told you: “We’re here to work hard. We’re here to do great work for our favorite clients, whom we love being a resource for. They come to us because they know we’re the champions.” This level of commitment comes at a cost. Do some people get burned out on a championship team like that? Sure. That kind of culture isn’t for everyone.
No shortcuts to success
It all comes down to how much you want to grow and how fast you want to grow. Ben Horowitz’s book The Hard Thing About Hard Thingsshows there are no shortcuts to success. Anyone who tells you they “work smart, not hard” has already put their reps in and pushed through a lot of adversity to get to where they are today. Again, there’s nothing wrong with taking a more laid-back approach to your career. Just set your goals accordingly.
If I’ve learned one important lesson throughout my life and career, it’s that the harder thing is usually the right thing. It’s usually the path to fulfillment. As author Jerzy Gregorek said, “Hard choices, easy life. Easy choices, hard life.”
How did you decide which team you wanted to be on? I’d love to hear from you.
The Public Company Accounting Oversight Board is rolling out a new series of staff publications targeted at auditors of small public companies, starting with one on critical audit matters, as board members face the likelihood of a deregulatory emphasis under the incoming Trump administration and probable changes in board composition.
The PCAOB released the first of the new series of staff publications, “Audit Focus: Critical Audit Matters,” which aims to provide easy-to-digest information to auditors, especially those who audit smaller public companies. With an eye toward protecting investors and improving audit quality, each edition of Audit Focus reiterates applicable auditing standards and staff guidance and offers reminders and good practices tailored to PCAOB-registered auditors of smaller public companies.
The PCAOB staff is continuing to identify a great many deficiencies related to critical audit matters. CAMs are a relatively new requirement from the PCAOB. A CAM is defined as any matter arising from the audit of the financial statements that was communicated or required to be communicated to the audit committee and that relates to accounts or disclosures that are material to the financial statements; and involved especially challenging, subjective or complex auditor judgment.
This edition of Audit Focus highlights key reminders on determination, communication and documentation of CAMs, along with the PCAOB staff’s perspectives on some of the common deficiencies, such as not accurately describing how a CAM was addressed in the audit, plus good practices that the staff has observed related to CAMs, such as use of practice aids.
PCAOB board members George Botic and Christina Ho discussed the recent inspection findings during a panel discussion Wednesday during Financial Executives International’s Current Financial Reporting Insights conference.
“When you think about where our inspectors see repeated observations, deficiencies, if you will, particularly in Part I.A, which are for the firms not obtaining sufficient appropriate audit evidence, things like revenue recognition, inventory, allowance for credit losses in the financial sector, areas around business combinations, allowance for allocation of purchase price, things such as that, as well as long-lived assets, goodwill, intangibles, evaluation, those are some of the more frequent areas,” said Botic. “ICFR certainly is one as well in the internal control space. But those areas, those themes, really haven’t changed. Sometimes we’ll see more of one versus another.”
During its inspections last year, the PCAOB saw some improvements at the largest firms, even though audit deficiency rates still appear to be high, with 46% of the engagements reviewed in 2023 having at least one deficiency significant enough to be included in Part I.A of the inspection report, excluding broker-dealer audit inspections, according to a staff spotlight publication that was released in August.
“There appears to be some improvement in terms of the deficiency rate trend for the largest firms,” said Ho. “It’s probably too soon to tell whether that is going to be the ongoing trend. Also for triennial firms, the spotlight also highlighted the fact that the deficiency rates are not improving.”
She pointed out that financial restatements are another way to look at the situation. “Obviously, the deficiency rate is not the only measurement of audit quality,” said Ho. “We also look at restatements, which I think for many of the preparers and audit committees that I talk to, and even investors, they focus on that metric a lot. The multiple metrics paint a picture.”
Botic sees advantages in having several such metrics. “The audit process is one of the most complex processes, probably in business,” said Botic. “When you think about all the judgments that you all go through for your financial statements and preparing them, then the auditor makes his or her own risk assessment judgments, it’s an incredibly complex process. So I agree, not one metric necessarily is the only metric for sure. We’re inspecting the audit, so our inspectors are looking at what the auditor did or didn’t do, as the case may be, and as part of that, we may identify the accounting was wrong. That is one possibility, as Christina mentioned, the categorization of the reports. But in my view and from my prior life as well, and spending a lot of time in inspections, I actually think that the spread from the inspection deficiency rates for the filers that we looked at compared to the restatement number, I think that’s actually … reflective of the success of our inspection program.”
Ho recently found herself singled out in a letter from a pair of Senate Democrats, Elizabeth Warren of Massachusetts and Sheldon Whitehouse of Rhode Island, for painting an overly rosy picture of the problems plaguing auditing firms, and she complained in a LinkedIn post that they were “persecuting” her and trying to “stifle” her from “expressing views inconsistent with their false narrative.”
Accounting Today asked Ho during a press conference after the FEI CFRI session about the political pressure she faced, especially with President-elect Trump’s administration coming in and perhaps replacing PCAOB board members as happened during his first administration as well as the Biden administration.
“Like I said in my LinkedIn post, I’m not a political person,” Ho responded. “When I was at Treasury, I worked under two different administrations as a career person, and I always feel like accounting shouldn’t be political. But obviously, elections have consequences, and I’m not living in a cocoon that I’m not aware of what’s going on. I really do think that it’s in the best interest of the capital markets for political influence to be minimized to technical areas that require expertise, and that’s how I operate, whether I was in Treasury or even at the board here. I often feel like the areas we work in, auditing and accounting, are specialized and require expertise and I hope that the experts can always be allowed to voice their views and also do their job well.”
The PCAOB has been facing pushback on some of its proposed standards, such as the so-called NOCLAR standard on the auditor’s responsibility to detect noncompliance with laws and regulations, as well as proposed standards on firm and engagement metrics. The Securities and Exchange Commission has already approved and adopted one of the PCAOB’s more far-reaching standards, on a firm’s quality control system, Ho pointed out. However, she recognizes the criticisms that the PCAOB has been hearing about some of the other proposed standards, even though NOCLAR and the other standards are still scheduled on the agenda this year.
“One of the really important things that regulators should do is to listen,” said Ho. “We should take comments very seriously and we should not rush into adopting standards or rules when we don’t have enough evidence to support the benefits and also the effectiveness of those proposals.”
She acknowledged that the increased risks and responsibilities of auditors, as well as the potential penalties, may be one factor that’s making it harder to attract young people to the accounting and auditing profession.
“I have certainly heard many anecdotal comments about the regulatory environment making the profession less attractive,” said Ho. “I’ve heard from people who talk about how they don’t want to do public company audits because of the inspections, and also our posture on enforcement. If you are not allowed to get indemnified, you know, as an individual, if something happened and there’s in your sanction, certainly people consider that as an increased risk for what they do. I think these things have an impact on the attractiveness of the profession and certainly impact talent. That is some of the anecdotal information I’ve heard. I’ve also heard from smaller firms that they are trying to stay under the 100 number because that will move them into annually, inspected so that they can stay under 100 so they don’t have to be inspected every year. Those kind of comments certainly concern me, because I don’t think this audit marketplace can afford less competition and also less talent. These are things that I think about and I’m concerned about.”
The PCAOB typically inspects each firm either annually or triennially (i.e., once every three years). If a firm provides audit opinions for more than 100 issuers, the PCAOB inspects them annually. If a firm provides audit opinions for 100 or fewer issuers, the PCAOB, in general, inspects them at least every three years.
Ho was also asked about the PCAOB’s relationship with the Institute of Internal Auditors after the two organizations clashed over the PCAOB’s exposure draft for its audit confirmation standard initially seemed to blame internal auditors before it was revised following a protest by the IIA. Ho met with the IIA and established a better understanding.
“I have a good relationship with the IIA organization, and I actually have been an internal auditor before,” said Ho. “I understand what they do and their values and why it’s important. I certainly think that they play a key role in fostering the trust of the capital markets, because they are in the company. Different data that have been published that the external auditor, they come in and focus on the financial statements and the internal control over financial reporting. Their scope is limited to that, whereas the internal auditors are covering the entire company and the operations and and they have access to much more information and people than external auditors, so they play a key role in facilitating the trust. It looks like they are also focusing a lot on modernizing their standards. They have done that, and then they have been really focusing on AI as well. So I think that it’s important to make sure that all the key players in the financial report ecosystem are working together so that we can collectively ensure the quality of the financial reporting and the audit.”
Accounting Today also asked about the role of artificial intelligence and data analytics programs in auditing and if they could be degrading audit quality without the human element being present.
Ho pointed out that the PCAOB has published a staff spotlight report on generative AI. “What the staff is seeing from the firms and the issuers in terms of their use of AI, based on that, it’s pretty clear, and based on my understanding, too, that the use of AI in the audit and financial reporting is still very much focused on repetitive tasks and very low-level areas that do not involve human judgment,” she added. “And everything they were doing using AI still requires human supervision. At this point, I don’t see right now that AI is off doing its own thing. I know that the firms are making significant investments, and AI is evolving, and more and more companies are using them. There will be more maturity. And I think that there is an opportunity, which is why it’s very important for regulators to stay on top of that, to make sure that we’re proactive in thinking and to ensure that we put guardrails if needed to make sure that there is a responsible use of AI, but at the same time, not keep people from using technology to make audits more effective and efficient.”
To his followers, Roger Ver is known as Bitcoin Jesus, a charismatic advocate of the cryptocurrency that is once again captivating investors with record-breaking gains. But to the Internal Revenue Service, Ver symbolizes a new target in the digital age: a crypto holder suspected of failing to pay taxes after selling tokens.
U.S. prosecutors charged Ver this year with evading more than $48 million in taxes for selling $240 million in tokens. It’s the most prominent case dealing solely with tax fraud and digital-asset sales, and marks a break from the tradition of prosecutors tacking tax charges onto crypto cases for crimes like money laundering, ransomware attacks and investor scams.
Ver, 45, is awaiting a Spanish judge’s decision on whether he must be extradited to America after his April arrest in Barcelona while attending a crypto conference. The U.S. expatriate spent a month in jail before getting out on bail and moving to Mallorca, where he’s received a steady stream of visitors. An outspoken critic of the U.S. government, he said he’s being persecuted by prosecutors.
“They don’t like me, and they don’t like my political views, and they just came at me every which way,” Ver told Bloomberg News in an exclusive interview in late October.
Ver, a U.S. expatriate, awaits a Spanish judge’s decision over whether he will be extradited to America to face tax fraud charges.
Ver said the Justice Department has ignored evidence that helps his defense and refutes a central premise by prosecutors — that he intended to cheat the IRS. Rather, he said, he relied on professionals who advised him when IRS policy on taxing crypto sales was unsettled.
“I instructed all my tax attorneys and preparers, ‘We need to do everything perfectly because I don’t want any problem with the IRS at all,”‘ Ver said. “That was their instructions the whole time.”
A Justice Department representative declined to comment.
The seeds of Ver’s legal peril lay in his success as an early crypto investor — long before the latest Bitcoin rally fueled by Donald Trump’s U.S. presidential win. They center on his representations to the IRS and the agency’s reconstruction of his holdings.
Ver grew up in Silicon Valley, founding a computer company called MemoryDealers at the precocious age of 19. He also engaged in tax protests and ran for California’s legislature at 21 as a libertarian.
In 2001, he pleaded guilty to dealing explosives without a license. (Ver says he simply sold firecrackers on eBay.) He served 10 months in prison, which hardened his attitude toward the U.S. government. He left America in 2006, moving to Japan. He focused on building MemoryDealers and another firm, Agilestar, which sold optical transceivers.
Spreading the gospel
When crypto began, he embraced its promise for transferring wealth without government interference. He started buying Bitcoin in 2011 for less than $1, touting it at barbecues, parties and everywhere else. Intense and fast talking, he spread the vision of using crypto to buy a sandwich or even a car. When Bitcoin hit it big, Ver touted its potential from conference stages.
He co-founded Blockchain.com, a crypto company once valued at $14 billion, and was an early investor in payment processor BitPay and digital-asset firm Ripple. When the Bitcoin network underwent a software upgrade he opposed in 2017, Ver broke with the community, switching to a split-off called Bitcoin Cash. He said his current holdings include Bitcoin, Bitcoin Cash, Ether and Zeno.
Despite his notoriety, Ver decided in 2014 to renounce his U.S. citizenship, later becoming a citizen of St. Kitts and Nevis. U.S. citizens who expatriate and are worth more than $2 million must report their worldwide assets to the IRS, and pay an exit tax based on their asset sales.
As he planned to expatriate, prosecutors allege, Ver hid the number and value of Bitcoin he owned and controlled personally and through MemoryDealers and Agilestar, his California-based companies.
The IRS used blockchain analysis to determine that by early 2014, Ver and his companies owned about 131,000 Bitcoin trading between $782 and $960, according to the indictment — more than he reported in tax filings. He’s accused of tax evasion, wire fraud, and filing a false tax return.
Ver worked with a law firm and appraisers on the exit tax, but gave them false or misleading information about his Bitcoin holdings, and an exit tax return filed in 2016 failed to report the Bitcoin he owned personally and underreported the value of his companies, prosecutors charge.
The indictment also alleges Ver “fraudulently misrepresented and concealed” from the IRS the crypto that his companies sold in 2017 for about $240 million.
Ver disputes this characterization, but declined to discuss the indictment further or elaborate on his crypto holdings with Bloomberg.
A website, freerogernow.org, is linked to Ver’s personal website and encourages supporters to sign an open letter calling on the U.S. government to end his “unjust prosecution.” It adds some details about his investigation, including claims that IRS agents interrogated his tax lawyer in 2018 without a warrant and that litigation ensued about communications with his lawyers.
In 2022, the U.S. Supreme Court took up a case that didn’t name the parties but matched Ver’s circumstances. The court dropped that case in 2023 without issuing a ruling.
If he’s extradited, Ver’s case would be the first to go to trial on crypto-only tax charges. In February, a Texas man, Frank Ahlgren, was accused of underreporting capital gains from selling $3.7 million in Bitcoin. Ahlgren pleaded guilty in September.
Ver, who has more than 700,000 followers on X, spent years under IRS investigation as he traveled the world. In 2021, he posted a satirical video titled “Taxation is Theft.”
Ver was indicted Feb. 15 under court seal but didn’t learn about it until weeks later, when he was at the Privacy Guardians conference in Barcelona. His book, Hijacking Bitcoin: The Hidden History of BTC, had just gone on sale. A police officer approached him in the lobby of the W Hotel, asked him to confirm his identity, and said he had an Interpol arrest warrant for him.
“The bottom kind of fell out of my stomach and I was like, ‘Oh, my God, the U.S. is going to do this to me again,”‘ Ver said.
Back to jail
With his arrest, Ver returned to prison, this time to a two-man cell in Spain. Some inmates incorrectly assumed he was an American spy or undercover cop, he said.
“I didn’t tell anybody in there who I was because I didn’t want to get extorted or have any sort of problems with anybody,” Ver said.
Spain has been a close ally of the U.S. in extradition cases. This year, Spain sent Douglas Edelman, a former defense contractor, to face U.S. charges that he evaded taxes on more than $350 million in income. He’s pleaded not guilty and denies the charges.
Ver said he’s spending his days in Mallorca talking to his lawyers on Zoom, practicing Brazilian jiujitsu and entertaining friends visiting from overseas. He’s attended Bitcoin meetups, where he said he was well received.
Ver appeared in an HBO documentary about the origins of Bitcoin. A sparring partner from jiujitsu said he’s seen him in the show.
“I said, ‘Please, if you don’t mind, don’t mention that to anybody else.’ He said, ‘Sure, no problem.’ But he had kind of a sly grin when he said that to me.”
Super Micro Computer Inc., the troubled server maker whose auditor resigned last month, delayed yet another filing as it continues to search for a new accounting firm.
The company said Wednesday that it can’t file its 10-Q quarterly report for the three months ended Sept. 30 in a timely fashion and will also need more time to prepare its 10-Q for the first quarter of 2025. The firm has already failed to file its annual 10-K report for the period ended June 30.
Super Micro has seen more than $50 billion of its market value wiped out over concerns about its accounting. Earlier this year, a former employee alleged in federal court that the company had sought to overstate its revenue. Short seller Hindenburg Research later referenced those claims in a report, alleging “glaring accounting red flags.” In late September, the firm’s auditor Ernst & Young LLP resigned, citing questions about its client’s commitment to integrity and ethics.
The company’s board had formed a committee to review its internal controls. That panel has finished its investigation based on “initial concerns” raised by EY, Super Micro said in a filing Wednesday, but the committee “has other work that is ongoing.” The firm said it’s “diligently working” to find a new auditor.
Super Micro’s shares were down 2.9% in premarket trading Wednesday. The stock has plunged 82% since peaking in March.