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.
Andrew Sawers is the former editor of