Public Company Accounting Oversight Board chairman James Doty said in a speech Thursday that he is concerned about cuts in audit fees having an impact on the quality of audits as the auditing practice becomes a declining part of the revenue at accounting firms.
“To be sure, audit firms are innovating, but not in the area of the audit,” Doty said at Baruch College’s 13th Annual Financial Reporting Conference. “Audit fees have become a decreasing portion of audit firms’ revenues. Audit practices have shrunk in comparison to audit firms’ other client service lines—not all of which depend on the fundamental exercise of skepticism.”
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