This post has been updated to display fees in GBP.1
Between 2017 and 2018, 36 companies listed on the FTSE 350 changed their auditors, increasing audit fees for 21 of those companies.2
Effective since mid-2016, Directive 2014/56/EU together with Regulation 537/2014, mandates that auditor tenure for public interest entities (PIEs) will be limited to 10 years, though the same audit firm can be appointed for another 14 years in the case of joint audits. With this mandatory auditor rotation, we are expecting many of the FTSE 350 companies to be switching auditors in the coming years.

Summary of Changes:
- KPMG gained 13 new clients and lost 5
- PwC gained 9 new clients and lost 18
- EY gained 5 new clients and lost 4
- Deloitte gained 8 new clients and lost 8, breaking even
- Grant Thornton gained 1 new client and lost 1, breaking even
On average, for companies that changed their auditor, audit + audit related fees increased by 14.2% from 2017 to 2018.

As shown in the table above, 21 companies saw an increase in audit + audit related fees by an average of 32.1% between 2017 and 2018, ranging between a 0.5% and 158.1% increase. The 13 companies that saw their fees decrease did so by an average of 12.6%, ranging between a 0.1% and 28.8% drop. There were two companies (Diploma and PZ Cussons) that saw no change in fees during this time.
The 158.1% increase belonging to Micro Focus International PLC is an obvious outlier. Another outlier in terms of fees was GVC Holdings, which saw a 125.0% increase in audit + audit related fees, though much of that increase can be accredited to a large jump in fees for a subsidiary.
Now to compare these averages with the companies that did not change their auditors between 2017 and 2018. Of these 311 companies, 212 of them saw their fees increase by an average of 21.7%, 98 companies saw their fees decrease by an average of 7.2%, and only one company did not see any change in fees.

Companies that changed their auditor didn’t see a difference when it came to audit + audit related fees when compared to companies that did not change auditors; companies that changed auditors saw a 12% increase in audit + audit related fees, slightly less than the 14.6% increase for companies that didn’t change auditors. As shown in the table above, there is a noticeably different trend for non-audit fees; companies with new auditors saw a 9.2% decrease in non-audit fees while companies with the same auditor saw a 65.3% increase.
Overall, FTSE 350 companies that changed their auditor saw an average increase of 12% for audit + audit related fees and a decrease of 9.2% for non-audit fees. Companies with the same auditor saw an increase of 14.6% for audit + audit related fees and an increase of 65.3% of non-audit fees. In total, fees decreased by 5.1% for those companies that switched auditor and increased by 18.4% for those that did not.
This analysis was performed using the Europe Audit Fees database provided by Audit Analytics.
For more information on this post or access to our European databases, please contact us.
1. BP PLC, Genesis Emerging Markets Fund Ltd, Micro Focus International PLC, and Wood Group (John) PLC each reported their fees in USD for 2017 and 2018; the conversion rates of 0.740 and 0.784 were applied, respectively. Smurfit Kappa Group PLC reported its fees in Euros; the conversion rates for 2017 and 2018 were 0.886 and 0.897, respectively. TBC Bank Group PLC reported its fees in GEL; the conversion rates for 2017 and 2018 were 0.285 and 0.296, respectively. ↩
2. It should be noted that this data accounts for 347 of the companies listed on the FTSE 350. Plus500 Ltd, Network International Holdings PLC and Smithson Investment Trust PLC did not report audit fees for 2017 and 2018.↩