Publicly held companies paid an average of $3.3 million in audit fees in 2010, a slight 2 percent rise over the prior year, while public company audits averaged 12,540 hours , roughly the same as the year-ago period.
According to the annual Audit Fee Survey conducted by the Financial Executives Research Foundation, the research affiliate of Financial Executives International, which polled 250 executives from both public and private companies, private company respondents paid an average of $222,300 in 2010, essentially flat from 2009, while audit man hours among private concerns private companies averaged about 3,394 hours.
For the 46 companies responding with revenues between $25 and $99 million, 2010 audit fees decreased by an average of 2 percent. Private companies cited increased internal audit staff work and inflation as the central reasons for the decline in fees.
Aligning with survey results from the prior year, both public and private companies rated their auditors neutral to good across seven different criteria. Companies were by and large maintaining longstanding relationships with their auditors: the weighted average number of years based on all public company respondents was 21 years, while auditor relationships with private companies averaged less than half that at eight years.
For the first time the survey queried companies about their preparations for a formal risk management process. Among public companies, about two-thirds (66 percent) of respondents from large accelerated companies said that their company did have a risk management process in place, and that it had been rolled out to the entire company, but less than half (42 percent) of the non-accelerated filers responded similarly.
