Audit Analytics recently released its latest report, Twenty Year Review of Audit and Non-Audit Fee Trends. Using data from our SEC Audit Fees database, this report provides a detailed analysis and comparison of trends in audit and non-audit fees disclosed by SEC registered companies between 2002-2021.
Analyzing both the audit and non-audit fees paid to external auditors is of interest because it provides insights into both audit risk and auditor independence.
Audit fees are an indicator of audit complexity and risk. Higher risk audits require more auditor resources to reduce audit risk to an acceptable level. Analyzing these fees by industry, company size, and location illustrates the level of risk and auditor effort across various sections of publicly listed companies.
Furthermore, non-audit fees are of interest, both domestically and internationally. Regulators consider high non-audit fees to be an auditor independence concern, an area receiving increased attention in recent years.
Selected Report Highlights
The amount of audit fees paid by SEC registered companies in FY 2021 reached over $15.5 billion, with total fees climbing to $18.9 billion. This is the highest amount of total fees paid by this population over the last twenty years.
The average amount of audit fees paid per company increased in FY 2021 after falling considerably in FY 2020 during the COVID-19 pandemic. Average audit fees last year remained at a lower point than they had been in FY 2018 and 2019. The average amount of audit related fees also increased in FY 2021. Meanwhile, the average amount of tax fees and other fees either decreased or remained stable.
Non-audit fees (exclusive of audit related fees) as a percentage of total fees continued to decline in FY 2021. This is the lowest percentage recorded over the last 20 years.
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