Bramwell's Lunch Beat: KPMG's Best Year Ever
KPMG is bottom of the Big Four despite record revenues
The good news: KPMG had $23.4 billion in revenues worldwide in 2013, the firm’s highest total ever.
The bad news: Even with its record-breaking numbers, KPMG still ranks fourth in revenues among the Big Four firms.
KPMG could not overtake EY, which came in third with $25.8 billion in revenues, the London Evening Standard reported. Deloitte took the top spot in revenues among the Big Four firms in 2013.
“Deloitte overtook PwC as the world’s biggest number-cruncher earlier this year after its fourth successive annual improvement took turnover to $32.4 billion,” the article stated.
Budget deal wins broad bipartisan support in House
By a vote of 332 to 94, the US House overwhelmingly approved a two-year bipartisan budget framework on December 12 that will eliminate the threat of another federal government shutdown and modestly reduce the deficit over the next decade, USA Today reported.
“The agreement sets top-line federal spending figures through fiscal year 2015 and partially alleviates unpopular spending cuts known as the sequester,” the article stated. “Federal spending on defense and domestic programs will be capped at $1.012 trillion in fiscal year 2014 and $1.014 trillion for fiscal year 2015. It does not affect spending on entitlement programs like Social Security and Medicare.”
A vote on the deal is expected in the Democratic-controlled Senate next week, but Senate Majority Whip Dick Durbin (D-IL) warned on Thursday that Democrats will need at least five Republicans to support the package to ensure they can overcome a filibuster threat.
In a related article in Forbes on December 12, Roberton Williams wrote that the budget deal would not raise taxes – members of Congress can vote for it without violating their no-tax pledges – but the plan will collect billions of dollars in new revenue by boosting fees and increasing workers’ contributions to the Federal Employee Retirement System (FERS).
SC head accountant faces ethics hearing
South Carolina Comptroller General Richard Eckstrom is in some hot water after the state’s Ethics Commission found probable cause last month that Eckstrom violated South Carolina’s ethics law. He faces six charges of using campaign money for personal benefit, the Associated Press reported in an article published by the Charlotte Observer on December 12.
Eckstrom is accused of spending $1,642 in campaign money for gasoline, food, and a hotel stay to accompany his girlfriend to the Republican National Convention in Florida in August 2012. Eckstrom’s girlfriend was an alternate delegate, the article stated.
Eddie Gun, the comptroller general’s chief of staff, told the Associated Press a section of state law specifies that travel expenses connected to a political event can be paid out of campaign coffers. However, South Carolina Ethics Director Herb Hayden noted that Eckstrom was not at the convention in any official capacity; he attended functions using his girlfriend’s guest pass.
Industry wary of direction on FASB insurance contracts
A good article from Elizabeth Festa, regulatory and compliance news editor for LifeHealthPro, who recently wrote, “Some investors and insurers are concerned that the Federal Reserve Board may be backing the wrong horse in insurance contract accounting standards, while others representing US and global interests are worried about fast-tracking convergence of these standards in pursuit of global capital standards.”
The issue focuses on the Financial Accounting Standards Board (FASB) Topic 834, Insurance Contracts, which says that insurers should carry insurance liabilities at fair value, with all up-to-date market information included in their valuation, Festa noted.
“Investors and life insurers worry that if interest rates move upward, the value will decrease, and if they move downward, the opposite will occur even if the securities are not sold but are held to secure the cash flows they were expected to produce for long-term liabilities,” she wrote.
The rich do not pay the most taxes, they pay ALL the taxes
If you had the time to read the thirty-six-page report from the Congressional Budget Office (CBO) earlier this week, The Distribution of Household Income and Federal Taxes, 2010, you may have noticed that when it comes to individual income taxes, the top 40 percent of wage earners in America pay 106 percent of taxes. The bottom 40 percent pay negative 9 percent.
How does someone pay negative taxes? “The CBO’s formula offsets whatever taxes are paid with ‘refundable tax credits,’” CNBC Reporter Jane Wells noted. “Some of these are due to ‘government transfers’ of money back to the taxpayer in the form of Social Security and food stamps.”
According to the CBO, the richest 1 percent of Americans saw before-tax income grow more than 16 percent from 2009 to 2010, which Wells wrote “isn’t such a surprise since the stock market was coming off the bottom. Most of the rest of the country only saw gross incomes grow about 1 percent. When it comes to federal taxes, the top bracket paid 69 percent of the total last year. The bottom bracket paid 0.4 percent.”