PracticeAuditInvestors predict drop in audit fees

Investors predict drop in audit fees

Audit fees will drop as a result of proposed audit liability reforms, according to investors

Tim Bush, a director at Hermes Focus Asset Management, made the claim in a
paper co-authored with Stella Fearnley of the University of Portsmouth.

Auditor Liability Reforms in UK and US considered audit liability
regimes in both the US and the UK, as well as LLP status, proportional liability
and liability caps through engagements.

Such changes are set to affect the quality, price, profitability and
organisation of the market for audit services, both domestically and across
continents.

Reduced value may appear to be of concern to the investors initially, but,
stakeholders will only pay for what audits are worth to them, reducing the price
of audit services and the esteem they attach to the limited-liability audits, it
says.

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