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According to this article, finance executives attributed a 4.5% year-over-year increase in 2013 audit fees to review of manual controls resulting from PCAOB inspections and other PCAOB-related issues. The findings are based on this year’s FERF (FEI)/Audit Analytics Audit Fee Survey (paid publication), and include:

• Public companies paid an average of $7.1 million in audit fees in 2013 – an increase of 4.5% over audit fees paid in 2012
• 60% of respondents were required to change their controls, and 80% changed their control documents as a result of the PCAOB’s requirements or inspection feedback
• Public company audits required an average of 17,525 hours in 2013, at an estimated average cost of $249 per hour
• Average audit fees of companies with centralized operations – both public and private – were found to be significantly less than those with decentralized operations. On average, public companies with centralized operations paid $3.9 million for their annual financial statement audits, while those with decentralized operations paid an average of $9 million
• Public companies have used their audit firm for an average of 23 years
• 57% of public company respondents indicated an increase in internal cost of compliance with SOX within the past 3 years. However, many financial executives stated they believe they now have improved internal controls, making it worth the additional overall expense.
• 92% of public company respondents stated their boards annually assess their audit firm’s performance and independence qualifications

See also this FEI article. Prior audit fee studies are available in our “Audit Fees” Practice Area.

Podcast: Investor Views on Forward-Looking Information

In this podcast, Sandy Peters addresses a new report from the CFA Institute about investor perspectives on the use of forward-looking information in financial reporting, including:

– What historical developments prompted obtaining investors’ views about the use of forward-looking information?
– What are the report’s key findings?
– What does the CFA Institute plan to do with the findings, and what are the ultimate objectives?
– What should companies take away from this report?

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Optimizing the Value of Internal Audit
– Why You Shouldn’t Decide Anything Important at Your Board Meeting
– Study: CEO Succession Planning
– A Section 5 Case: Memories of Law School
– SEC Bars Bad-Faith Conduct Whistleblower From Any Awards Eligibility (Common Sense Prevails!)
 

– by Randi Val Morrison