I have long argued on these pages that the Sarbanes-Oxley Act, as irritating as it may be for corporate compliance and financial reporting executives, achieves its intended goal: to reduce the frequency of financial restatements that harm the investing public. We first saw evidence along those lines in 2007, when the total number of restatements began to fall for companies that were complying with SOX. Back then, however, Corporate America was still screaming about the skyrocketing fees it had to pay to external auditors. Regulators adjusted their rules for SOX compliance so auditors would be less outrageous with their demands (and, consequently, their fees).
Now, as you can see for yourself in our lead story this month, that stifling atmosphere of high audit fees is improving as well. The median audit fees paid by companies in the Standard & Poor’s 500 fell 5.4 percent last year; the median total fees paid to external auditors (including tax and non-audit fees) fell 7.4 percent. In total, nearly two-thirds of the S&P 500 paid less in fees to their auditors in 2009. (You can download a spreadsheet listing all those fees and the year-over-year change in fees paid from our Website, www.complianceweek.com. See Page 34 of the October print edition for details.)
