We'd say you heard it here first, kids but actually you heard it from CFO Journal:
U.S. securities regulators are wary that pressure to reduce auditor fees could lead to worse audits.
Regulators grow “worried” when auditor fees appear to fluctuate with economic cycles, Paul Beswick, chief accountant at the Securities and Exchange Commission, said at a Practising Law Institute conference in Washington, D.C., on Saturday.
“I wouldn’t actually think audit fees should fluctuate with the state of the economy,” Mr. Beswick said. “In fact, as the economy gets worse, I would think the auditors need to spend more time.”
Beswick is a tad worried that audit committees are more concerned with fees than audit quality, which, you know, is like worrying someone who was considering a Tesla Model S would settle for a Nissan Versa if the price is right.
We present to you this year over year audit fee data from Audit Analytics which we shared with you last year for your consideration:
The only "fluctuation" I see here is a steady increase in fees since 2002 right until the economy tanked, then another uptick that put us right back to 2008 levels. This frightens the SEC somehow?
This does beg the question — now that the PCAOB is getting only slightly more nit-pickier about documentation (or rather, the firms are anticipating this and therefore being more audit firm-y in a proactive sort of way), what will happen to audit fees? Surely the firms will have to compensate for all that extra work and all. Is this Beswick's way of telling clients to shut up and accept higher audit fees because audit quality isn't a freaking charity?
