Audit Fees Could Be Set to Decline

Securities and Exchange Commissioner Paul Atkins recently told several U.S. business leaders in Japan that a recently issued auditing standard should eventually cut audit fees, according to WebCPA.

In July, the SEC approved the risk-based Audit Standard 5 from the Public Company Accounting Oversight Board, which companies had complained was unnecessarily time consuming and inefficient.  According to WebCPA, Atkins says the new standard to force changes on auditors as they try to comply with section 404 of Sarbanes-Oxley on auditing internal controls at companies.

“If auditing fees do not come down as a result of these changes, then something is terribly wrong with the interpretation of Audit Standard 5 and perhaps with the competitive landscape in the auditing profession itself,” WebCPA quotes Atkins in saying in a speech before the American Chamber of Commerce last week in Japan.  “Auditors need to change their approach in response to the new standard.  The PCAOB needs to inspect with an eye toward ensureing that auditors are applying the new standard properly.  The SEC, in turn, should keep a close eye on PCAOB and whether Section 404 reforms are working.”