* Fees to external auditors up 2.2 pct in 2008
* Large companies’ rose 4.2 pct to $5.7 mln on average
NEW YORK, June 3 (Reuters) - Accounting and audit firms that sign off on the financial books of public companies charged slightly more for their services in 2008, despite the recession, according to a survey on Wednesday.
The Financial Executives Research Foundation (FERF), which surveyed 110 executives at publicly held companies, found that fees paid to external auditors increased by 2.2 percent in 2008, compared to the total audit fees they paid in the prior fiscal year.
Large companies saw an even bigger increase in audit fees. They rose 4.2 percent to about $5.7 million per company on average for the 2008 fiscal year for 56 of the public companies polled that had market capitalizations over $700 million.
The survey, which also polled 245 executives at private companies, showed total audit fees paid also rose an average 3.7 percent for privately held firms.
The slight increase in fees is a sharp change from the earlier part of the decade when the 2002 Sarbanes-Oxley internal controls legislation led to a balloon in audit fees.
The public companies polled were optimistic that audit fees would be little changed in 2009, with only 19 percent expecting an increase in audit fees. More than two-thirds of public companies in the survey said they had “negotiated hard” with their audit firms on fees.
“After five years of Sarbanes-Oxley and extensive corporate governance reform in the U.S., and with more companies taking on an increasing amount of auditing work internally, we are at a point now where many public companies are anticipating a stabilization of audit fees,” said Marie Hollein, president of Financial Executives International, a trade group for corporate finance executives and comptrollers that is affiliated with FERF.
According to the survey, public companies are still mostly using the “Big Four” accounting firms with about 86 percent of those polled using PricewaterhouseCoopers [PWC.UL] Deloitte & Touche [DLTE.UL], Ernst & Young [ERNY.UL], or KPMG [KPMG.UL]. Only about 38 percent of the privately held companies polled used one of the Big Four for their audit needs.
The survey also found that companies still hold onto their auditors for years, with very few companies planning to change their auditors in the next year. The average public company polled in the survey has used its current auditor for about 15.9 years. (Reporting by Emily Chasan; Editing by Gary Hill)
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