FERF'S 15th Annual Audit Fee Survey and Insights Report Reveals Six Percent Increase
MORRISTOWN, N.J., Dec. 17, 2024 /PRNewswire-PRWeb/ -- The Financial Education & Research Foundation (FERF)—the independent non-profit research affiliate of Financial Executives International (FEI)—today released the findings of its 15th Annual Audit Fee Survey and Insights Report. The study looks at various factors affecting financial reporting and external audits.
Overall, average audit fees increased by 6.4 percent from 2022 to 2023. Fifty-seven percent of Member company respondents indicated working harder to support the 2023 audit as compared to the previous year. Changes to ICFR were cited as the most common increase in company audit effort (43%), followed by 29 percent for changes to organizational structure, M&A, and turnover in company or audit team staff, respectively.
Seventy percent of respondents indicated that the audit increased the quality of financial reporting. The lack of significant changes from standard setters and regulators contributed to a relatively calm audit landscape allowing for process improvements.
IT Audit is on the Rise with 72 Percent of Respondents Citing an Increase
The PCAOB's emphasis on internal controls and processes, coupled with companies continuing digital transformation journeys, are driving elevated IT audit efforts. Last year just 53 percent of respondents noted an increase in their auditor's IT audit effort. IT audit efforts are expected to rise in the coming years.
Still No ROI for AI
AI has been applied to fewer than 20 percent of public company audits and fewer than 3 percent of private company audits. The use cases for AI have not evolved beyond other tools such as general ledger anomaly detection and financial statement tie-out.
"Over the past couple of years of relative calm in the financial reporting ecosystem, our members worked with their auditors to deliver high-quality financial reporting," said Andrej Suskavcevic, CAE, President and CEO of Financial Executives International and Financial Education & Research Foundation. "As financial stewards, our Members are keenly aware of the impacts of inflation on their audit fees and by extension, their organization. We expect to see further increases in audit fees as notable changes to financial reporting unfold. Specifically, the FASB's Disaggregation of Income Statement Expenses standard represents a potentially large burden to implement and audit. In addition, audit firms will need to implement and comply with several new PCAOB standards in the next several years."
Methodology and Sources
FERF's 15th Annual Audit Fee Survey and Insights Report examines audit fees companies paid to external auditors for auditing and related services for the period June 1, 2023 and May 31, 2024. The report is based on surveys distributed to FEI members and qualitative interviews between August and October 2024. Representatives from 123 private companies/nonprofits and 50 public company members participated in the research. Eight senior-level finance professionals from five public companies and three private companies completed qualitative research interviews. In addition, the report also examines audit fees as reported by more than 4,000 SEC filers provided by the Calcbench financial data platform.
The 15th Annual Audit Fee Survey and Insights Report can be obtained by visiting the online FERF bookstore at http://www.financialexecutives.org/research.
About Financial Education & Research Foundation, Inc.
Financial Education & Research Foundation (FERF) is the non-profit 501(c)(3) research affiliate of Financial Executives International (FEI). FERF researchers identify key financial issues and develop impartial, timely research reports for FEI members and nonmembers alike, in a variety of publication formats. FERF relies primarily on voluntary tax-deductible contributions from corporations and individuals, and publications can be ordered by logging onto http://www.financialexecutives.org/research.
About FEI
Financial Executives International (FEI) is the leading association and advocate for the views of corporate financial management. Its members hold policy-making positions as chief financial officers, chief accounting officers, controllers, treasurers, and tax executives at companies in every major industry. FEI enhances Member professional development through peer networking, career management services, conferences, research, and publications. Members participate in the activities of local Chapters in the U.S. FEI is located in Morristown, NJ. Visit http://www.financialexecutives.org for more information.
About Calcbench
Calcbench is a financial data platform designed for outperformance. Founded in 2011, the company uses the latest technology to offer instant and systematic access to all the data (numbers and text) in financial statements, including the details hidden within the footnotes. Developed by former analysts and supported by a team of financial experts, Calcbench was built for data analysis looking to go deeper. Visit http://www.calcbench.com to learn more.
Media Contact
Lili DeVita, FEI, 973.765.1021, ldevita@financialexecutives.org, www.financialexecutives.org
Claudine Cornelis, Crimson Communicates, 845.842.1715, claudine@crimsoncommunicates.com, www.crimsoncommunicates.com
SOURCE FEI
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