Audit fees are virtually static despite an increase in total fee income across accounting firms in the UK in the last year and the number of audit firms is also down nearly 5% year on year, reveals the latest research from the Financial Reporting Council (FRC) annual report into the state of the UK accounting market
Big Four audit fees were up by only 0.1%, while there has been a 9.5% increase in audit fee income for other larger registered firms, largely as a result of merger and acquisition activity in 2013 and the transfer of local authority audits from the Audit Commission to the private sector.
The thirteenth edition of the FRC’s Key Facts and Trends in the Accountancy Profession also shows total fee income for all 24 firms surveyed increased in 2013-14, with larger registered firms outside the Big Four again posting a 15.1% compared with the Big Four firms’ growth of 4.3%. However, the report only analyses data from 24 firms which submitted full data for the research.
The percentage of fee income derived from non-audit clients has been rising steadily between 2010 to 2014 for both the Big Four and many of the larger firms outside of the Big Four by 5% and 7% respectively. This is mirrored by a slow decrease in the proportion of fee income from non-audit work for audit clients.
