Audit Analytics has released its annual audit fees report, Seventeen Year Review of Audit Fee and Non-Audit Fee Trends, which focuses on the audit and non-audit fees paid and disclosed by accelerated and large accelerated filers over a seventeen-year period.
A review of non-audit fees as compared to audit fees is of interest, as the SEC considers high non-audit fees to be an auditor independence concern. To address this concern, the SEC created audit fee categories, requiring registrants to disclose fees as follows: Audit Fees, Audit Related Fees, Tax Fees, and All Other Fees.
At times, analysts prefer to view audit fees in isolation while others prefer to see audit fees and audit related fees together. For this reason, the report provides both approaches.
Audit fees have continued to increase over the last eight years, climbing from $7.2 billion in 2010 to $9.3 billion in 2018. Similarly, the ratio of audit fees (including audit related fees) over revenue also increased from $544 in fees per $1 million in revenue in 2010, to $575 in fees per $1 million in revenue in 2018.
As shown in the graph below, audit fees (excluding audit related) totaled 80.1% of the total fees paid by accelerated filers in 2018.
This amount increases to 90.2% with the addition of audit related fees.
Non-audit fees (excluding audit related) represented about 9.8% of the total fees paid by accelerated filers in 2018, significantly less than the 38.0% these fees accounted for in 2002.
The report provides a comprehensive analysis of the following:
- Audit fees and non-audit fees including audit related fees
- Audit fees and non-audit fees excluding audit related fees
- Audit fees and non-audit fees (including and excluding audit related fees) by companies that disclosed a financial restatement in FY 2014
The analysis in this report was done using the Audit Fee and Financial Restatement databases, powered by Audit Analytics. For more information on Audit Fees, or to request a copy of the full report, please contact us.