Armanino White Paper
White Paper

2020 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 2017, 2018 and 2019.


WHAT’S YOUR FEE-TO-VALUE PROPOSITION?

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 700 California-based public companies’ revenues and audit fees over the past three years (2017-2019). Consistently, we found companies overpaying for their national and Big 4 audits.

In 2019, companies with less than $50M in revenue listing Big 4 firms as their auditors paid 141% higher fees than the average fees paid by firms with the same revenue. In addition, companies within the $50M-$100M revenue range paid 48% higher fees than average when working with the Big 4.

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 for significant cost savings with increased service.


Are you paying above-average prices for an audit?


<$50M In Revenue

In 2019, companies with less than $50M in revenue listing Big 4 firms as their auditors paid 141% higher fees than the average audit fee of $403,975. Companies listing national firms as their auditors paid $344,986, or 15% less than average for an audit.

Companies using regional firms paid an impressive 343% less than average, paying an average of $91,056 for their audit.

SEC Audit Fee Report 2020 $50M and Less Revenue Graph


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$50M-$100M In Revenue

In 2019, companies with $50M-$100M in revenue listing Big 4 firms as their auditors paid 48% higher fees than the average audit fee of $804,209. Companies listing national firms as their auditors paid $427,606, or 47% less than average for an audit.

Companies using regional firms paid $526,703, or 35% below average, for their audit.


SEC Audit Fee Report 2020 $50M - $100M Revenue Graph

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$101M-$500M IN REVENUE

In 2019, companies with $101M-$500M in revenue listing Big 4 firms as their auditors paid 20% higher fees than the average audit fee of $1,487,914. Companies listing national firms as their auditors paid $868,874, or 42% less than average for an audit.

Companies using regional firms paid an impressive $735,686, or 51% below average, for their audit.


SEC Audit Fee Report 2020 $101 - $500M Revenue Graph

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$501M-$1B IN REVENUE

In 2019, companies with $501M-$1B in revenue listing Big 4 firms as their auditors paid 7% higher fees than the average audit fee of $2,188,764. Companies listing national firms as their auditors paid $1,379,933, or 32% less than average for an audit.

Companies using regional firms paid $568,950, an impressive 72% under averagefor an audit.

SEC Audit Fee Report 2020 $501M - $1B Revenue Graph

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>$1B IN REVENUE

In 2019, companies with more than $1B in revenue listing Big 4 firms as their auditors paid $5,966,035 in audit fees, on average. Companies listing national firms as their auditors paid $2,291,288, or 60% less than average for an audit).

SEC Audit Fee Report 2020 $1B and More 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 consider an auditor switch. As one of the largest regional firms in the nation, 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 many issues today’s public companies face.


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July 15, 2020

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