2017 Audit Fee Survey Report

FEIAuditFee2017ReportCover.jpgPublic company respondents to FERF’s 2017 Audit Fee Survey Report, sponsored by Workiva, reported a median increase of 1.3 percent, compared with 1.6 percent in the 2016 edition of the report.
Private companies reported a median increase of 3.7 percent, compared with 2.9 percent, and non-profit respondents said their organizations’ median increase was 1.6 percent, compared with 2.3 percent.
Taking a broader look at public companies, an analysis of 2016 SEC filing data by data analysis provider MyLogIQ reveals a median audit fee increase of 2.6 percent among 6,394 registrants. This compares favorably with the 3.5 percent median increase reported for the 2015 audit season.
Overall, 2,296 registrants (36 percent) reported an audit fee decrease, while 2,120 registrants (33 percent) reported an increase in their audit fees.
Factors Behind Increases
Mergers and acquisitions, growing documentation requests from external auditors and new accounting standards were among the factors contributing to higher fees.
M&A contributed to higher audit fees for nearly three-fourths of the 80 public companies that reported fee increases for their 2016 audits. For instance, one chief accounting officer at a healthcare provider cited acquisition-related valuation services and purchase accounting reviews as major factors for higher audit fees.
As in recent surveys, the Public Company Accounting Oversight Board (PCAOB) was cited by numerous respondents as a factor in increased audit fees, particularly for more comprehensive documentation requests.
The new revenue standard has had a limited effect on audit fees so far, but 68 percent of respondents expect fees to increase for audits of their 2017 results and in upcoming PCAOB inspections.