A news release said the latest annual poll also contained statements of overall contentment by the surveyed companies in their relationships with their external auditors. Respondents expressed satisfaction with their current auditor, and very few revealed intentions to change them –11% of private companies and 5% of public companies plan to make a switch.
On average, both public and private companies also gave their auditors positive marks across the board, rating them with scores ranging from 3.6 to 4.3 (based on scale of one to five, with five being very good) in areas that included communication, technical skills, knowledge of their business, status reporting, audit administration, global coordination and audit efficiency. Public companies also reported an average 16-year relationship with their current auditor.
Respondents experienced stabilization in their external audit fees in 2009. Publicly held companies surveyed this year paid on average $4.8 million in total audit fees for fiscal year 2009. This year’s private company respondents reported an average of $291,200 in 2009 audit fees, stating that the amount was almost identical to the fees they paid in the prior year. In terms of man hours, public company audits averaged approximately 21,458 hours in 2009, while private companies averaged about 2,606 hours.
“Companies by and large this year are expressing relative ease in the audit process, which is a positive sign,” said FEI President and CEO Marie Hollein, in the news release. “We have seen past respondents predict that the fees would stabilize, and the new pool of companies surveyed are showing that this is beginning to happen for them. We believe this is crucial – as the internal finance staffs continue to take on new responsibilities.”
The news release said findings also included that:
- For public companies, the hourly audit fee rate per hour averaged $218 ($186 for non-accelerated filers and $220 for the large accelerated filers). Interestingly, the lowest hourly rate ($110) and the highest hourly rate ($400) were both reported by large accelerated filers. For private companies, the hourly audit fee rate per hour averaged $185 ($159 for the smallest companies to $243 for companies with annual revenues of $1 billion to $4.9 billion.)
- Average audit fees of companies with centralized operations were significantly less than those with decentralized operations, for both public and privately-held companies. In particular, public companies with centralized operations paid $1.9 million for their annual financial statement audits, while those with decentralized operations paid $7.7 million in 2009.
- Most large accelerated filers list their shares on the NYSE Euronext Stock Exchange, while most of the smaller publicly-held companies list their shares on NASDAQ.
The Audit Fee Survey, which is conducted annually by FERF, polled nearly 350 executives, representing both U.S. publicly held companies (of which 85% were accelerated filers with total market capitalizations of more than $75 million), privately held companies and foreign companies, to examine the total fees companies paid to external auditors in 2009 and their overall satisfaction with their audit firms.
Results are free for FEI members, and nonmembers can purchase the survey results for $129, by visiting the FERF bookstore online at www.ferf.org/bookstore.