Survey of Audit Fees 2004-05 may2006 2

Carolh

Description

Survey of Audit Fees Bahia Dawlatly reports It is good practice for every organisation to review their audit service on a regular basis, and consider putting it out to tender every five or so years. Below are the results of a recent survey of over 80 organisations (short list is in Table 1). These results give what different sized organisations paid for their audit in 2004-2005. Table 2 shows the change in audit fees from last year. Table 2: Change in audit fees Annual Average fee Average fee Change Income 04-05 03-04 % Below £1m £2,735.50 £2,510.50 8.2 £1m - £5m £7,313.00 £6,669.00 8.8 £5m - £25m £16,026.50 £15,900.00 0.8 £25m - £50m £29,000.00 £28,500.00 1.7 £50m - £100m £48,000.00 £48,000.00 0.0 Above £100m £82,625.00 £88,000.00 -6.5 The survey found that the highest and lowest audit fees paid, as a percentage of income, were 1.2% and 0.05% respectively. As shown in Table 3 the higher the income the lower the percentage of audit fee relative to income. Organisations with an annual income below £1m spent, on average, 0.83% of their income on audit fees and those with an annual income between £1m and £5m paid, on average, 0.33%. In contrast, organisations with an annual income above £5m paid, on average, 0.16%; and those with an income over £25m paid just 0.10%. Table 3: Average audit fees These results show that there is a correlation Annual Audit fee as % between annual income and audit fees - the ...

Informations

• Publié par: Kocuj
• Nombre de lectures: 64
• Langue: English

Extrait

Survey of Audit Fees

Bahia Dawlatly reports

It is good practice for every organisation to review their audit service on a regular

basis, and consider putting it out to tender every five or so years.

Below are the results of a recent survey of over 80 organisations (short list is in Table 1).

These results give what different sized organisations paid for their audit in 2004-2005.

Table 2 shows the change in audit fees from last year.

Table 2: Change in audit fees

The survey found that the highest and lowest audit fees paid, as a percentage of income,

were 1.2% and 0.05% respectively. As shown in Table 3 the higher the income the lower the

percentage of audit fee relative to income. Organisations with an annual income below

£1m spent, on average, 0.83% of their income on audit fees and those with an annual

income between £1m and £5m paid, on average, 0.33%. In contrast, organisations with an

annual income above £5m paid, on average, 0.16%; and those with an income over £25m

paid just 0.10%.

Table 3: Average audit fees

These results show that there is a correlation

between annual income and audit fees - the audit

fees will decrease, relatively, as the income

increases thanks to economies of scale. Some

auditors may charge a minimum fee of, say, £2,500

per audit, however small the organisation. If this is

so in your case you should review the service and

decide whether it is value for money.

Similarly, whether the statutory accounts are prepared in-house or by the auditors has

an impact on the audit fee. If statutory accounts are prepared in-house the audit fee

as a percentage of income is significantly lower - 0.19% compared with 0.69%. You

should therefore consider whether it is more cost effective to prepare your statutory

accounts in-house.

Annual

Income

Average fee

04-05

Average fee

03-04

Change

%

Below £1m

£2,735.50

£2,510.50

8.2

£1m - £5m

£7,313.00

£6,669.00

8.8

£5m - £25m

£16,026.50

£15,900.00

0.8

£25m - £50m

£29,000.00

£28,500.00

1.7

£50m - £100m

£48,000.00

£48,000.00

0.0

Above £100m

£82,625.00

£88,000.00

-6.5

Annual

Income

Audit fee as %

of income

below 1m

0.83%

1m - 5m

0.33%

5m - 25m

0.16%

25m - 50m

0.10%

50m +

0.10%

Table 1: Results of audit survey

Annual

Income

04-05

Audit fee

04-05

Audit fee

is as %

income

Annual Income

04-05

Audit fee

04-05

Audit fee

is as %

income

£140,000

£90.00

0.06

£3,260,000

£6,000.00

0.18

£184,256

£293.75

0.16

£3,883,403

£5,657.00

0.15

£220,848

£900.00

0.41

£5,100,000

£7,628.00

0.15

£264,806

£2,808.00

1.06

£5,517,642

£16,757.00

0.30

£284,731

£1,763.00

0.62

£6,587,240

£10,000.00

0.15

£357,863

£4,113.00

1.15

£7,004,224

£7,050.00

0.10

£417,862

£3,901.00

0.93

£7,092,069

£29,408.00

0.41

£477,387

£1,821.00

0.38

£8,244,000

£10,000.00

0.12

£566,496

£4,726.00

0.83

£8,400,000

£18,000.00

0.21

£573,352

£4,831.00

0.84

£9,300,000

£15,000.00

0.16

£690,954

£1,786.00

0.26

£9,500,000

£8,500.00

0.09

£811,039

£2,938.00

0.36

£10,100,000

£25,000.00

0.25

£902,364

£4,750.00

0.53

£10,227,860

£22,919.00

0.22

£986,727

£7,000.00

0.71

£11,721,000

£14,420.00

0.12

£1,014,729

£2,300.00

0.23

£12,765,000

£19,000.00

0.15

£1,143,176

£4,469.00

0.39

£14,697,000

£17,000.00

0.12

£1,482,288

£5,405.00

0.36

£14,983,000

£25,630.00

0.17

£1,557,682

£7,637.50

0.49

£17,471,000

£9,100.00

0.05

£1,700,000

£8,000.00

0.47

£17,845,000

£20,000.00

0.11

£1,750,018

£3,525.00

0.20

£18,790,000

£13,000.00

0.07

£1,922,000

£6,500.00

0.34

£19,731,393

£17,529.00

0.09

£1,965,385

£4,762.00

0.24

£24,286,000

£38,000.00

0.16

£1,994,588

£6,500.00

0.33

£26,500,000

£28,000.00

0.11

£2,100,000

£4,500.00

0.21

£28,000,000

£22,000.00

0.08

£2,113,757

£11,479.75

0.54

£28,255,000

£30,000.00

0.11

£2,492,667

£2,320.00

0.09

£29,743,000

£32,000.00

0.11

£2,648,696

£14,785.00

0.56

£35,000,000

£19,188.00

0.05

£2,830,889

£8,145.00

0.29

£45,715,000

£65,000.00

0.14

£2,950,000

£4,900.00

0.17

£49,279,000

£36,000.00

0.07

£2,954,000

£3,478.00

0.12

£51,973,000

£43,000.00

0.08

£2,959,046

£5,377.00

0.18

£89,866,000

£69,880.00

0.08

£2,985,787

£21,200.00

0.71

£94,841,000

£138,000.00

0.15

£3,048,000

£8,450.00

0.28

£109,950,000

£83,000.00

0.08

Sources: Survey of SITRA members, and Charity Finance Magazine

(

www.charity-finance.co.uk

)