Audit fees are rising. Most finance leaders understand why. The more important question is whether the service, accessibility and insight they receive are improving too.
Why are audit fees increasing?
Audits have become more complex. Audit firms face greater regulatory scrutiny, higher expectations around audit quality and continued pressure to invest in technology, quality controls and specialist expertise.
Businesses have become more complex too. Acquisitions, refinancing, international expansion, new systems and increasingly sophisticated reporting requirements can all add to the work required during an audit.
The profession itself is changing. Consolidation, external investment, competition for experienced people and the cost of maintaining audit quality all affect the economics of delivering an audit.
In many cases, higher audit fees are understandable. The issue is not simply that the cost has increased. It is whether the client experience and overall value have improved alongside it.
Audit fees have risen, but are businesses seeing better service?
For the CFO or Finance Director of a growing or private equity-backed business, life is rarely becoming simpler. Finance leaders are expected to support strategic decisions, manage risk, meet investor requirements and help the organisation grow, while still delivering accurate reporting and a well-run audit.
Against that backdrop, the audit relationship matters. A technically sound audit is essential, but the way it is delivered also has a real effect on the finance team.
Common frustrations finance leaders still report
Many finance leaders continue to describe the same concerns, even as fees rise:
• A different audit team each year, with limited continuity
• Emails taking longer to answer
• Issues emerging late in the audit process
• Less visible senior or partner involvement
• More of the administrative burden falling back on the finance team
An audit can be delivered to a high technical standard and still leave the finance team feeling unsupported. Service quality matters because poor communication, late surprises and repeated re-briefing create additional work at the busiest point in the reporting cycle.
What should businesses expect from their auditor?
A partner who understands the business
Effective audits rely on context. A partner who understands the organisation, its objectives and its risks can ask better questions, identify potential issues earlier and have more useful commercial conversations.
A consistent audit team
Continuity improves efficiency for everyone involved. Knowledge is retained, less time is spent repeating background information and the audit process is more likely to improve from one year to the next.
Issues identified early
Difficult conversations do not become easier when they are left until the final week. Strong audit planning should bring significant accounting judgements, reporting issues and evidence requirements to the surface early enough to address them properly.
Commercial conversations as the business evolves
Acquisitions, funding changes, overseas growth and new systems can create accounting and reporting consequences. The best audit relationships allow those conversations to happen as the business changes, rather than only after decisions have been made.
Responsive communication
Audit timetables are demanding. Clear ownership, realistic deadlines and access to senior people help reduce uncertainty and keep the process moving.
How to assess whether your auditor is delivering value
If your audit fee has increased, these questions can help assess what you are receiving in return:
• Does the audit partner know your business and remain visible throughout the year?
• Is there continuity in the audit team?
• Are material issues identified and discussed early?
• Are requests clear, proportionate and well coordinated?
• Does the team respond within sensible timescales?
• Are conversations commercially useful as well as technically accurate?
• Does the audit process become more efficient as the relationship develops?
Not every fee increase will produce an immediate or obvious service improvement. However, businesses should be able to understand what has changed, why the audit costs more and how the firm plans to deliver an effective, well-managed process.
Audit fees and service quality should move together
Few business leaders expect audit fees to remain unchanged forever. Regulation, complexity and market pressures all affect the cost of delivering a high-quality audit.
But paying more makes it entirely reasonable to ask what you are getting in return. Is the audit more proactive? Are senior people accessible? Are issues raised sooner? Does the process support the finance team rather than adding avoidable pressure?
The strongest audit relationships are not built around compliance alone. They are built around trust, continuity and accessibility, supported by sound technical work and a genuine understanding of the business.
Over the last three years, has your audit fee increased faster than the quality of service you have received?
Frequently asked questions
Reviewing your audit relationship?
A useful starting point is to consider whether your current service provides the continuity, accessibility and early engagement your business now needs. Speak to the NLP audit team to discuss what a well-managed audit could look like for your organisation.