Audit fees paid by public companies are starting to rise after several years of downward pressure following financial market turmoil and economic decline. The latest data soon to be published from Audit Analytics will show audit fees paid by more than 2,300 accelerated filers, or larger public companies, as a percentage of revenue turned upward by an average of 1.4 percent in 2013 after four consecutive years of decline.

Audit fees as a percentage of ratio peaked in 2004, the earliest days of Sarbanes-Oxley implementation, when companies paid $592 in audit fees for every $1 million in revenue. The ratio tapered off to $528 per million in 2008, then jumped again to $574 per million in 2009. Audit Analytics says the 2009 increase is attributable not to an increase in audit fees, but a decline in revenue. In actual dollars, audit fees paid by all public companies in the research population fell from $7.84 billion in 2008 to $7.51 billion in 2009. After that anomalous 2009 jump, the ratio dropped the next three consecutive years to $511 per million in 2010, $484 per million in 2011, and $472 per million in 2012 before turning north again in 2013 to $479 per million.

With respect to non-audit fees paid to a company’s principal auditor, Audit Analytics says the ratio of non-audit to audit fees fell to its lowest level in the 12 years the firm has studied audit fees. Non-audit fees fell to $126 per $1 million in revenue in 2013 from $128 per million in 2012, a 1.57-percent slip, the firm says.

The latest data is consistent with the direction of the recently published survey findings from the Financial Executive Research Foundation, which said public companies reported an average 4.5-percent increase in audit fees in 2013. Although Audit Analytics’ data tempers the size of the increase compared with FERF’s survey data, both suggest audit costs are rising.

Public companies that responded to the FERF survey attributed the rise in audit costs to increased scrutiny on audits by the Public Company Accounting Oversight Board, which has delivered some stark inspection results to all the leading audit firms over the past few years. The PCAOB has tasked audit firms across the profession to get more skeptical, perform more testing, provide more documentation of audit steps and conclusions, and show more scrutiny of revenue recognition and accounting estimates.

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