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Audit Fees Rise Slightly in 2008

Four-fifths of public companies surveyed expect unchanged or lower fees this year

By Susan Kelly | Updated on June 16, 2009

Publicly traded companies saw their audit fees rise less than 3% last year but they’re working to keep an even tighter lid on fees this year. Public companies paid an average of $3.7 million to their outside auditors in 2008, up just 2.2% from the previous year’s total, according to a survey of 360 public and private companies conducted by Financial Executives International (FEI). The private companies surveyed, which were generally smaller than the public companies, paid average audit fees of $219,500, up 3.7% from 2007. The public company audits on average required 9,881 hours of auditors’ time last year, while audits of private companies took 1,903 hours.

Executives from public companies are optimistic about the outlook for this year’s audit costs: Just 19.4% expect their audit fees to rise, while 80.6% expect them to come in unchanged or lower, with almost a third predicting audit fees will decline by between 2% and 10%. About two-thirds of the executives say they’re bargaining hard with their outside audit firm, while 54.5% say they’re doing more of the work themselves, 9.1% say they’ve switched to a regional audit firm and 8.2% are putting the audit out for bid.

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