Non-audit fees being squeezed
FTSE100 companies use their auditors for much less non-audit work, newresearch shows.
Figures from the Pensions Investment Research Consultants (Pirc) showed that fee income from non-audit work, such as tax and corporate finance advice, fell significantly last year.
Across the board, Pirc found that the ratio of audit to non-audit fees for the average FTSE 100 company was now 1:1.5.
This was down on last year when for every £1m spent on audit, leading UK companies paid auditors a further £2.2m for consultancy work.
This drop was reflected in PwC’s non-audit fees, which dropped to £151m from £217m.
Similarly, KPMG saw their fees fall from £73m to £53m.
The figures were revealed in Pirc’s 2004 corporate governance annual review.
Companies are now required to reveal how much they pay their audit firms for non-audit services.
Fears have surfaced that if a company does audit and non-audit work for the same company, their work will be compromised.