Non-audit fees being squeezed

Link: Non-audit work now forms bulk of E&Y business

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.

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