Survey of Audit Fees 2004-05 may2006 2
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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 ...
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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
)
