Armanino White Paper
White Paper

2018 SEC Audit Fee Survey

by Matthew Perreault

A comparison of public company audit fees, sorted by revenue, paid to regional, national and Big 4 external auditors during 2015, 2016 and 2017.


WHAT’S YOUR FEE-TO-VALUE PROPOSITION?

When it comes to public companies, the fee-to-value proposition makes regional audit firms the most attractive option for companies on the lookout for a new audit partner—and significant cost savings with increased service.

Armanino reports annual audit fees from the 10-K and proxy statements of California-based, publicly traded companies, providing you with a tool to help you quickly compare your audit fees to those of your peers from the same revenue bracket.

We compiled and analyzed more than 600 California-based public companies’ revenues and audit fees over the past three years (2015–2017). Consistently, we found companies overpaying for their national and Big 4 audits.

In 2017, companies with less than $50M in revenue listing Big 4 firms as their auditor paid 69% higher fees than the average fees paid by firms with the same revenue. In addition, companies within the $50M–$100M revenue range paid 41% higher fees than average when working with the Big 4.

Are you paying above-average prices for an average audit?


<$50M IN REVENUE

In 2017, companies with less than $50M in revenue listing Big 4 firms as their auditor paid 69% higher fees than the average audit fee of $429,009. Companies listing national firms as their auditor paid 33% less than average for an audit ($286,543).

Companies using regional firms paid an impressive 63% less than average, paying an average of $159,890 for their audit.

SEC Audit fee survey <$50M in revenue graph

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$51M–$100M IN REVENUE

12In 2017, companies with $51M–$100M in revenue listing Big 4 firms as their auditor paid 41% higher fees than the average audit fee of $708,003. Companies listing national firms as their auditor paid 23% less than average for an audit ($544,977).

Companies using regional firms paid an impressive 43% below average, paying $402,205 for their audit, on average.

SEC Audit fee survey $51M - $100M in revenue graph

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$101M–$500M IN REVENUE

In 2017, companies with $101M–$500M in revenue listing Big 4 firms as their auditor paid 16% higher fees than the average audit fee of $1,342,923. Companies listing national firms as their auditor paid 34% less than average for an audit ($885,232).

Companies using regional firms paid an impressive 61% below average, paying $521,583 for their audit, on average.

SEC Audit fee survey $101M-$500M in revenue graph

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$501M–$1B IN REVENUE

In 2017, companies with $501M–$1B in revenue listing Big 4 firms as their auditor paid 7% higher fees than the average audit fee of $2,380,949. Companies listing national firms as their auditor paid 31% less than average for an audit ($1,532,155).

Companies using regional firms paid an impressive 77% under average, paying $515,442 for an audit, on average.

SEC Audit fee survey $501M-$1B in revenue graph

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>$1B IN REVENUE

In 2017, companies with more than $1B in revenue listing Big 4 firms as their auditor paid $5,713,641 in audit fees, on average. Companies listing national firms as their auditor paid 64% less than average for an audit ($1,858,957).

SEC Audit fee survey $1B in revenue graph

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FINAL THOUGHTS

Whether you use this report to compare your audit fees to the average or directly with your peers, we hope you have found valuable insight to help guide you when you face an auditor switch. As a regional firm, Armanino has been handling the accounts of publicly traded companies for more than 20 years, matching the Big 4 and national firms’ capabilities and resources, including meeting international requirements.

If you’re considering a move to a new audit firm or just looking for a more cost-effective solution to handle tax accounting, disclosure or internal control issues, Armanino is in the right position, equipped with the resources and expertise to deliver a complete solution at a reasonable fee. Our team of professionals, which includes Big 4 veterans, has the experience and knowledge to solve the issues facing today’s public companies.

Source: Audit Analytics, 2018.


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December 17, 2018

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