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FTSE 250 Auditors Survey 2017: sting in the tail as audit fees rise

Even with record volumes of audit contracts changing hands among the FTSE 250, a significant number of companies are still choosing to stick with their current auditors. But is there a sting in the fee tail as the scale of tendering and transition costs become apparent? In the annual Accountancy FTSE 250 auditors survey, Philip Smith examines the latest trends in audit fees and the lack of competition from outside the Big Four

More than £48m worth of audit contracts either changed hands in 2016 or will do so over the next two years among the FTSE 250 group of companies. That is a quarter of the total value of audit fees in this second tier of corporate UK, which was worth £193.6m (2015: £181.3m) to the largest audit firms.

There is more tender activity to come. At least £27m is on the negotiating table as more than 30 FTSE 250 companies are either going through an audit tendering process at the moment or expect to either this year or next.

Add in the 22 companies that over the past year have elected to keep their existing auditors following a competitive tender, with a combined value of £20m, and you can understand why it is no exaggeration when the Big Four accountancy firms and their mid-tier competitors say it has been a very busy 12-month period.

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