Annually, we compare and analyze public company audit fees paid to regional, national and Big 4 auditors during the prior three-year period, and consistently, we find they’re overpaying for their national and Big 4 auditors while receiving lower-quality audits.
For example, in 2013, companies with less than $50M in revenue listing Big 4 firms as their auditor paid more than twice as much as those using a non-Big 4 firm. Companies with revenues in the $50M to $100M range paid 45% higher-than-average fees when working with the Big 4.
The fee-to-value ratio makes switching to a regional firm an attractive option for public companies on the lookout for a new auditor.
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