US audit fees keep on rising
Firms still earning on back of Sarbox compliance
Compliance with Sarbanes-Oxley corporate governance measures by US companies
has seen audit fees continue to rise, although the actual cost of complying with
the rules has dropped for some.
Law firm Foley & Lardner’s fourth annual Sarbanes-Oxley study found that
costs associated with Sarbox reforms dropped 16% for companies with less than
$1bn (£540m) in annual revenue and 6% for companies with greater than $1bn in
annual revenue.
However, audit fees increased, as did the cost of board compensation and
liability insurance for directors and officers.
Audit fees rose 22% for small companies, 6% for midsize companies and 4% for
large companies (as defined by Standard & Poor’s indices).
These results confounding predictions that US companies would only face a
one-off increase in audit fees and other costs as a result of the laws.
The report also found that one-fifth of companies are considering going
private as a result of the compliance burden.