The proportion of audit vs. non-audit fees paid by public companies to their audit firms held steady in 2007 after the dramatic shift that occurred with Sarbanes-Oxley.

According to the latest data from Audit Analytics, fees for audit work paid by public companies to audit firms accounted for 79 percent of the total amounts those companies paid to audit firms in 2007. The remaining 21 percent paid to audit firms represents consulting services that are not directly tied to the audit work for financial statements or internal control over financial reporting.

Non-audit fees as a portion of total fees paid to audit firms plunged in 2002, 2003, and 2004 with implementation of Sarbanes-Oxley, which brought in new requirements for auditors to establish more independence from their clients. The split between audit and non-audit fees has remained relatively stable from 2005 to 2007, according to Audit Analytics.

Don Whalen, director of research for the firm, says it tracks audit vs. non-audit fees as a way of helping monitor auditor independence. “The Securities and Exchange Commission and other agencies are concerned if the principal auditor earns too much on the non-audit fee side of things, they inadvertently become biased when performing the independent audit,” he says. “It’s critical to keep a finger on the pulse of audit fees and non-audit fees.”

Whalen said it might be unrealistic to expect any further spread between audit and non-audit fees. “Some regulations require the auditor to help registrants prepare for regulations,” he says. “I think 20 percent is a good figure. If 80 percent of the money is coming from the independent audit, then the independent audit isn’t going to be influenced by the other one-fifth.”