Audit Fees Up for DJIA Firms

-- Has Sarbanes-Oxley ushered in the golden age of auditing? According to disclosures by 23 of the 30 companies that comprise the Dow Jones Industrial Average, audit fees rose roughly 40 percent, to $533 million, according to figures from The Wall Street Journal. That number represents nearly twice the percentage rise in audit fees received in 2003 versus 2002. Audit fees generated about 65 percent of the total of $821 million that SEC issuers paid to their audit forms, a stark contrast to four years earlier when audits accounted for just 30 percent of the total monies paid out to the accounting firms. However, the 2002 passage of SOX prohibited a total of nine services to audit clients. The 2004 report stated that most of the 23 companies paid more for audits than for consulting or other services -- with IBM and Johnson & Johnson being two notable exceptions. For example, IBM shelled out more than $21 million for the audit and $55 million in other fees to its independent accountant, Big Four firm PricewaterhouseCoopers. Big Four firm KPMG was the beneficiary of the highest audit largesse, receiving more than $102 million from General Electric Co. of which nearly $80 million of that went to audit services.