Pounds and sense – FD's Audit Fees Survey 2009

After Enron, auditor independence took precedence as non-audit fees came under intense scrutiny, becoming subject to legislative reform by way of Sarbox and placing restrictions on the additional services that could be provided by statutory auditors. Then audit fees rose sharply as the Big Four undertook extra work to ensure major PLC accounts were compliant with the onerous legislation.

Today, the financial and the banking crises have dragged auditing back into the spotlight, thanks not least to the Auditing Practices Board’s early October consultation paper – which cites our 2007 audit fees data.

This year’s analysis – again, with audit fees data provided by corporate governance consultancy Manifest – compares the most recent corporate data with what we published in 2007.

We’ve found a sharp increase in audit fees over the past two years - +35% for the statutory audit of FTSE-100 companies, +27% for the FTSE-250, while banks, with the notable exception of Lloyds Banking Group, saw significant fee increases over our 2007 survey. In the larger company index, non-audit fees are up 20%, not least in the area of tax compliance and the “other” category; the smaller index saw a fall in audit-related and “other” fees.

Download a PDF copy of our previous audit fees study, from 2007

Andrew Sawers is the former editor of Financ ial Director