Audit Fees Continued to Climb in 2024

Public company audit fees rose to record levels last year. Ideagen Audit Analytics’ (IAA) annual analysis of fees paid to external auditors reports that, in FY2024, the average public company’s total payments to its auditor rose to $3.26 million, a nine percent increase from 2023.  See Audit fee trends: A 20-year review (September 2025).  Average fees rose for the third consecutive year in 2024, a trend that IAA attributes to “the increasing complexity and regulatory demands of the auditing landscape.” 

IAA’s analysis is based on fee information from SEC Forms 10-K, 20-F, and 40-F and from proxy and information statements. The analysis excludes Investment Company Act of 1940 filers and public company subsidiaries and affiliates that are included in the parent's audit fee reporting. For a discussion of last year’s IAA fee report, see It’s Another All-Time High! Audit Fees Rose Again in 2023, January 2025 Update.  (The 20-year fee table in IAA’s report is inconsistent with data reported for 2023-2005 in the fee table in last year’s report, as is some of the other comparative information in the report. The reason for these inconsistencies is not explained.)

Other highlights of IAA’s report include:

• Total fees SEC registrants paid to auditors increased even though the number of public companies fell. In 2024, the 6,656 public companies in IAA’s analysis paid $21.675 billion in fees to their external auditors. Compared to 2023, this represents a 1.4 percent increase in total fees, despite a seven percent decrease in the SEC registrant population. The 6,656 public companies that reported fees for FY2024 is the lowest number of reporting companies in the 20-year period covered in IAA’s report. In contrast, the $21.675 billion in fees is the highest annual amount. 

• Average audit, audit related, and tax fees all rose in 2024.  As noted above, the average total fee payment in 2024 was $3.26 million, compared to $3.06 million in 2023. Total fees are comprised of audit fees, audit-related fees, tax fees, and other fees. Looking only at the audit fee component of total fees, the average company paid $2.726 million, up eight percent from $2.516 million in 2023. The average amount that SEC registrants paid for other types of services (i.e., audit-related fees, tax fees, and other) was $530,000, a 14 percent increase from $460,000 in FY2023. 

• Audit fees per $1 million of revenue fell slightly. In FY2024, audit fees per $1 million of client revenue averaged $612, a decrease of one percent from $619 in 2023. Audit fees per million dollars of revenue peaked in FY2006 at $743. In 2013, audit fees were $566 per $1 million of revenue, the lowest in IAA’s 20-year data series. Between FY2023 and FY2024, total SEC registrant revenue decreased by two percent while total audit fees increased by 0.6 percent.

• The four largest audit firms dominate the public company audit market. In FY2024, 69.5 percent of SEC registrant audit fee payments were to a Big Four firm (PwC, EY, Deloitte, and KPMG). Over 250 other firms account for the remaining 30.5 percent.  All four of the large firms had record total audit fees in 2024. PwC had the highest average audit fee amount, $5.52 million per client. PwC also had the highest market share with slightly over 20 percent of total audit fees.  EY was second with slightly under 20 percent.

• Foreign private issuers (FPIs) paid more in audit fees as a proportion of revenue than domestic companies. FPIs paid $638 in audit fees per $1 million of revenue, a one percent increase over FY2023.  In contrast, U.S. companies paid an average of $606 in audit fees per $1 million of revenue, a decrease of two percent from FY2023. However, falling revenue, not rising fees, drove the increase in FPI audit fees relative to revenue. Total FPI revenue fell 5.3 percent in FY2024, while total audit fees decreased four percent. 

• The average audit fee rose for companies of all sizes. For large accelerated filers, average audit fees increased five percent to $6.06 million in FY2024. Accelerated filers paid an average of $1.62 million in FY2024 audit fees, a one percent increase from FY 2023. For the smallest public companies, non-accelerated filers, average audit fees increased three percent to $734,000. Companies in the size mid-tier, accelerated filers, experienced the highest audit fees relative to revenue. In FY2024, accelerated filers paid $2,201 per $1 million of revenue, compared to $1,349 for non-accelerated filers and $523 for large accelerated filers.

• Industry matters.  As was the case in the prior year, the industry sectors with the highest average audit fees in 2024 were Finance ($4.055 million) and Manufacturing ($3.386 million). The industries with the lowest average audit fees were Life Sciences ($1.579 million) and Real Estate and Construction ($1.421 million). Average audit fees increased for all eight of the industry sectors that IAA tracks.

IAA discusses factors that have contributed to the increase in audit fees during the past 20 years. These include:

• Regulatory changes, such as new or amended auditing standards, FASB accounting standards, and SEC regulations.

• “Increasing business complexity, including mergers and acquisitions and international operations [which] create additional regulatory oversight.”

• New risks associated with investments in technology.

• Rising labor and technology costs.

• Consolidation in the audit industry, driven by mergers and private equity investment.

Audit Committee Takeaways

Audit committees may find IAA’s report useful for benchmarking changes in their company’s fees against industry-wide trends and against data for companies similar in size or in the same industry sector. This type of analysis could help in assessing whether fee increases proposed by the company’s auditor are consistent with overall trends, reflect company-specific factors (such as changes in reporting complexity, acquisitions, or weaknesses in internal controls), or might be driven by the audit firm’s inefficiency or pricing power.

​High or low fees relative to peers could also be an audit risk indicator.  Low fees might raise questions about the adequacy of the scope of the audit or the resources the auditor devotes to the engagement.  High fees might suggest that the company’s controls or accounting systems have inherent weaknesses.​  The audit committee could use the IAA report as a basis for discussion with the auditor about whether the audit plan appropriately scales resources to the audit risks.

Committees may also want to focus on how the level of fees their company paid for non-audit services compares to the averages. As IAA points out, financial statement users may view high levels of non-audit service fees as potentially impacting auditor independence.