Date: 13th June, 2000 Release Date: immediate
Non-audit fees race ahead as analysts fears grow about audit independence
Brand Finance plc is pleased to further the debate on auditors independence with the release of two new research studies. The first questions 292 UK City analysts and 47 UK plc's on the topic of audit independence and the second is an examination of audit and non-audit fees paid to auditors by constituents of the FTSE350.
The FTSE350 study reveals that non-audit work continues to race ahead and now represents 66.9% of total fees received by audit firms (61% in 1998). These figures suggest, as Arthur Levitt stated recently, that auditors are serving two gods, management and investors. This emphasis is now most definitely moving to management. The audit and non-audit receipts for individual companies are set out below: As can be seen on average non-audit fees are over 200% of audit fees.
Our parallel survey of analysts and companies found:
David Haigh, a chartered accountant and Chief Executive of Brand Finance plc, states:
"Our study reveals that the SEC's concerns about auditor independence are shared by the majority of equity analysts. There is also significant concern with the concept of audit partners retaining an interest in divested consultancy businesses. In our view the Institute of CA's will need to be vigilant concerning audit partners shareholdings in such enterprises and the proposed use of audit companies brand names by de-merged consultancies. There is a possibility of client confusion and damage to the integrity of the audit profession if de-merged firms are permitted to use big five brand names."
|Brand Finance is the world's leading independent brand valuation company. Brand Finance offers a range of marketing finance services to international blue chip companies. The team of experts in the field of finance, accountancy and marketing is led by David Haigh, the founder and Chief Executive. David is a leading authority on marketing accountability and brand valuation.|
For a full report, further details or comment please contact:
Stephen Cheliotis, Media Relations Manager
Telephone: 020 8607 0300, Fax: 020 8607 0301
Web site: www.brandfinance.com