Audit Analytics has released its annual audit fees report, Sixteen 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 sixteen-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 seven years, climbing from $7.4 billion in 2010 to $9.3 billion in 2017. Similarly, the ratio of audit fees (including audit related fees) over revenue also increased from $547 in fees per $1 million in revenue in 2010, to $617 in fees per $1 million in revenue in 2017.
As shown in the graph below, audit fees (excluding audit related) totaled 80.0% of the total fees paid by accelerated filers in 2017.
This amount increases to 90.1% with the addition of audit related fees.
Non-audit fees (excluding audit related) represented about 9.9% of the total fees paid by accelerated filers in 2017, significantly less than the 38.4% 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 adverse attestation for FY 2014