PracticeAuditFee padding is rampant, say FDs

Fee padding is rampant, say FDs

Accountancy Age survey showed that fewer than one in ten finance directors thought the profession was wholly honest when it came to charging for accounting and audit work.

Link: Click here for the Big Question results

Accounting firms have denied there is a problem with the industry after this week’s Accountancy Age/ Reed Accountancy Personnel Big Question showed that 80% of respondents believed accountants and auditors padded out their bills and overcharged for work, while only 8%, believed that this did not happen.

Comments such as ‘is the Pope Catholic?’ from Contisteel finance director Nick Watkins reflected a deep feeling of mistrust of the industry and its charging practices. ‘In 70%-80% of cases [overcharging] would probably be true,’ said Yo!Sushi FD Zoe Tindall.

Peter Mitchell, chairman of the Small Practitioners Association, defended the position of smaller firms saying that they had no sensible reason to overcharge as competition was so heavy that clients could easily move to another firm.

‘Obviously you get one or two clients who will question their bills but you normally tend to agree a fee with clients, or a region the fee will be in, upfront to avoid these situations,’ said Mitchell.

He added that this may be more of an issue at the other end of the scale with larger companies but for small practitioners working with small firms, it was easier to demonstrate where the fees were coming from.

Steve Maslin, head of assurance at Grant Thornton, was also surprised at the results of the survey.

‘As a firm we are very happy to be transparent with our clients over fees to the point of sitting down and going through questions on exactly what we’re doing and how much each part costs.’

Maslin added that clients should establish a firm basis of what the fees are going to be like before taking on the company, but as a firm they had little trouble from clients complaining about overcharging.

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