Chicago (May 19, 2004) -- Nearly two years after the passage of the landmark Sarbanes-Oxley Act, auditor fees jumped an average of 23 percent, according to a survey by national law firm Foley & Lardner LLP.
Fees paid to outside auditors have continued to increase by double digits year-over-year since the 2002 inception of SOX, with Section 404 compliance cited as one of the primary drivers of audit fee hikes, according to the survey of 115 public companies, “The Cost of Being Public in the Era of Sarbanes-Oxley.”
With regard to specific company size, that fee hike averaged about 20 percent for small-cap companies, 18 percent for mid-cap companies and 24 percent for S&P 500 companies.
Overall, the F&Y Study concluded that, post-SOX, the cost of being public for a company with annual revenue of over $1 billion rose 130 percent from FY 2001 to FY 2003.
Meanwhile, with the gradual shift from consulting work due to SOX restrictions and the sell-off of three of the Big Four’s consulting units, the survey found that fees for “non-audit” services declined an average of 20 percent between FY 2002 and FY 2003. The average decline in non-audit fees was 13 percent among small-cap companies, .04 percent for mid-cap concerns and 22 percent for S&P 500 members.
-- WebCPA staff
