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Companies take action against rising audit costs, FERF study says

Tammy Whitehouse | December 1, 2016

Audit cost increase for public companies are outpacing the Producer Price Index, but the largest public companies appear to be keeping the lid on cost increases by increasing their focus on internal controls and making themselves more ready for an audit.

The latest data on audit costs from Financial Executives Research Foundation, which focuses on median figures to eliminate the effect of outliers, says audit fee increases across all public companies landed at 3.2 percent for 2015 audits. That compares to the 2015 U.S. average PPI of 1 percent. The gap was a little smaller in 2014, where the audit fee median increase fell at 3.4 percent and the average PPI at 1.8 percent. “We’ve found for several years now is that rate of increase in audit fees always seems to be a couple percentage points more than the Producer Price Index,” said Bill Sinnett, chief operating officer for research at...

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