Are the Big Four Gouging?

The explosive rise of Big Four audit fees appears to be one of the many unintended consequences of Sarbanes-Oxley, one that has CEOs shaking their heads in bafflement, resignation and, in more than a few cases, outright anger. Regardless of size, geographic location and industry, public companies ar...

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Bibliographic Details
Published inChief Executive no. 206; p. 20
Main Author Brewster, Mike
Format Trade Publication Article
LanguageEnglish
Published New York Chief Executive Magazine, Incorporated 01.03.2005
Subjects
Accounting firms
Annual reports
Audit committees
Audit fees
Auditing
Auditing standards
Auditors
Big Four accounting firms
Compliance
Costs
Financial executives
Financial statements
Internal controls
Professional fees
Public companies
Public Company Accounting Reform & Investor Protection Act 2002-US
United States > US
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Summary:The explosive rise of Big Four audit fees appears to be one of the many unintended consequences of Sarbanes-Oxley, one that has CEOs shaking their heads in bafflement, resignation and, in more than a few cases, outright anger. Regardless of size, geographic location and industry, public companies are facing skyrocketing accounting fees - and management teams can do little about it. Leaders at some of the Big Four firms say rising auditing costs are the result of market forces and that CEOs, of all people, should understand. As public companies scramble to include their internal controls certifications in their annual reports to the SEC, auditors are spending enormous amounts of time applying the new standard. One issue is whether the Big Four had adequate time to prepare for all these changes. They say they didn't, but not everyone agrees. In addition to the soaring costs, another problem public companies face is their auditors' inability to accurately predict how many hours will be involved.
ISSN:0160-4724