US public companies have reported a rise in audit fees and total auditor working hours in 2010, compared with the previous year, while many private companies have experienced a decrease in fees, according to a report.
Financial Executives International’s (FEI) annual The Audit Fee Survey polled 250 executives from US public and private companies, non-profit organisations and foreign companies.
Public companies, of which 84% were accelerated filers with total market capitalisation of more than $75 million, said on average they paid $3.3 million in audit fees in the last financial year, an increase of 2% due mainly to changes in company operations.
Respondents from private companies said they paid the same amount in 2009 and some said fees even decreased, according to the report.
International Accounting Bulletin reports back claims that audit fee pressure is still posing a problem in the US but the FEI survey indicates it could be easing somewhat for the country’s largest companies.
Private company respondents also reported average fees of $222,300 in 2010, about the same amount that they paid in the previous year. Of the 46 companies with revenues between $25 and $99 million, 2010 audit fees decreased by an average of 2 percent. Private companies cited increased internal audit staff work and inflation as the central reasons for their change in fees.
With regard to man hours, public company audits averaged approximately 12,540 hours in 2010, while private companies averaged about 3,394 hours throughout the year.
The report concluded that companies generally maintain a strong and longstanding relationship with their auditor. Eight out of ten public companies said they used Big Four audit firms while only three out of ten private companies did.