Less is more for auditors, survey finds
Auditors spend only one extra day on accounts but fees rocket
The auditors of the UK’s blue chip companies spent just one extra day signing
off accounts in 2005, but still took home a whopping £636.5m in auditor fees as
FTSE100 audit revenues soared 15%.
Research published by Accountancy Age’s sister publication Financial
Director in its annual audit fee survey revealed that on average audits of top
flight companies took just 60 days to complete, only a day extra than last year,
even though revenues were soaring as a result of the introduction of IFRS and
Sarbanes-Oxley.
In individual cases some of the country’s biggest companies even managed to
increase audit speed. BP, which incurred the largest audit fee of £23.5m in
2005, reduced its sign-off time by 48 hours to 38 days.
AstraZeneca also improved audit speed by two days to 27 days, making it the
fastest FTSE100 audit. BSkyB delivered the second-fastest audit, which took only
33 days.
Other improvers among the firms included Imperial Tobacco and Tesco, which
reduced the time spent on their audits by nine days and seven days,
respectively, while British Airways completed its audit in 42 days, five days
less than 2004.
Overall, since 1997, average FTSE100 sign-off times have now fallen from 67
to 60 days, while the average audit fee has rocketed from £1.95m to £3.26m over
the same period.
Some companies, however, did not enjoy the speedy audits of their
contemporaries. WPP Group, which paid £8.4m for its audit, was the slowest in
the FTSE100 with
an audit that took 130 days to complete while Antofagasta’s audit lasted 123
days.
Royal Dutch Shell’s auditors KPMG and PricewaterhouseCoopers spent 117 days
reviewing its accounts, although this was a 26-day improvement on 2004.