Link: The survey in full
The sixth annual audit fee survey showed that non-audit fees had dipped by just over 5% – not huge but a figure which has industry observers wondering what will happen in following years.
Research for the survey was conducted on annual reports for 2001-2002 and revealed that KPMG and PricewaterhouseCoopers bore the brunt of the non-audit fee losses.
Andrew Sawers, editor of Financial Director, said: ‘The debate about auditor independence was underway when the Enron scandal blew up at the end of 2001.
‘Our survey reveals there has been some slowdown in the amount of non-audit fees, but the audit committees’ reports make it clear FTSE-100 companies are being much more careful about how they allocate non-audit work.’
Meanwhile, total audit fees earned from the top 100 listed companies increased by almost 10% to £237.73m. PwC remains the biggest fee earner with £93.94m. Its nearest rival, KPMG, earned a third less with £64.93m.
Average sign-off time for accounts is still shrinking, this year’s was 59 days. When the survey began six years ago, companies were largely dragging their heels and getting their accounts signed off in a leisurely 67 days.
The finance team at BSkyB continued to be fastest at turning round the accounts though slowed to a 30 day sign-off compared to 24 last year.
HSBC still pays the largest audit fee of all those in the FTSE-100 at £16.75m, while supermarket chain Morrisons pays the smallest at £148,000. A small rise in the average audit fee has also been detected of 7.6% from £2.21m to £2.38m.Perhaps the biggest winner is Aviva (once CGNU). After dropping PwC as joint auditor and using just Ernst & Young, it has cut its cost by £2m to £3m.
Simon Wright of CareersinAudit.com discusses how an effective cyber defence force is critical to businesses worldwide and how internal auditors can make the transition to a new career in cyber security
The FRC has said that the investigation will 'consider, but not be restricted to, issues regarding misstated accounting balances'
Craig Maxwell joins the audit and assurance team in Scotland
Stephen Grayson to join the audit department in Manchester