PracticeAuditAudit charges set to rise

Audit charges set to rise

Increased regulation, the introduction of IFRS, and a skills shortage driving up wages mean that 75% of FDs expect their audit charges to climb in the next financial year.

Link: Salaries set for double-digit growth

Of the 223 FDs polled, a third expect a rise of up to 5%, just over a quarter anticipate a hike of up to 10%, while 6% see their fees rising by up to one fifth, and 7% foresee rises of more a fifth.

One FD said: ‘I would expect there to be additional chargeable work regarding IFRS’.

Another said: ‘We are being told by our auditors that we have to pay higher salaries to retain staff as there is an upturn in the accountancy job market. This inevitably is a prelude to higher fees.’

Many felt their fees would not rise. One FD said an improvement in his company’s software systems meant less work for the auditors, and another said he intended to negotiate a status quo because existing fee levels still provided a huge margin for the auditors.

Last week, Accountancy Age reported that salaries could go through double digit growth in the next year after a survey showed the average wage packed had grown by 5.3% in the past six months.

Ernst & Young chairman Nick Land said the recruitment market was becoming very competitive as the economy picked up.

And Phil Sheridan, regional manager for Robert Half Accounting & Finance, described the pay rises as a ‘knee jerk reaction’ to an upturn and a huge increase in recruitment activity.

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