External audit fees are finally beginning to moderate and in some cases decline for big companies for the first time since the Sarbanes-Oxley Act went into effect in 2004.
A study by Compliance Week of the audit fees paid in 2007 by S&P 500 companies with more than $1 billion in annual revenue found only a 3.2 percent median increase over their audit costs in 2006. That compared to a 4.4 percent increase from 2005 to 2006. When audit fees at a handful of 2007 companies with extraordinary transactions were eliminated from the calculations, the average audit fee in 2007 actually fell by 0.3 percent. The study credited the approval of Auditing Standard No. 5 for making audits more cost effective.
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