I didn't get enough detailed information to warrant an answer, but
here's what I know as a comment:
The U.S. Securities and Exchange Commission does require audit fees to
be reported, as well as any other non-audit fees paid to the same
company. As for European requirements...I'm not sure. Here are some
references for more information:
http://www.gsb.stanford.edu/research/reports/2001/nelson.html
Auditor Conflicts and Earnings Quality
Research By
Karen Nelson
Assistant Professor of Accounting
Stanford Graduate School of Business
Richard M. Frankel
Assistant Professor of Accounting, Economics and Finance
MIT Sloan School of Management
Marilyn F. Johnson
Associate Professor of Accounting and Information systems
Eli Broad College of Business
Michigan State University
In recent years, a dramatic increase in the revenues big accounting
firms derive from management consulting services has raised a red flag
about auditor objectivity. The Wall Street Journal reported in April,
for example, that just last year Sprint paid Ernst & Young $2.5
million for auditing but $63.8 million for other work, including $12
million for the deployment of a financial-information system. General
Electric paid KPMG $24 million for auditing but more than three times
that for other services. This growing trend triggered the Securities
and Exchange Commission to seriously question whether auditors have a
conflict of interest that compromises the quality of an audit. Left
unchecked, such conflicts could undermine the credibility of earnings
statements upon which stock market activity hinges. Until now, the
audit industry has disputed these claims, in part because there has
been no evidence to suggest auditors have lost their objectivity.
But in a ground-breaking study analyzing the effects of accounting
firms' consulting business on the independence of their auditors,
Stanford Graduate School of Business faculty member Karen Nelson and
her colleagues provide the first hard evidence showing that the
provision of non-audit services impairs an auditor's independence and
dangerously stretches the bounds of accepted accounting practice. "Our
motivation for doing the paper comes out of the SEC's policy agenda of
trying to crack down on so-called earnings management," says Nelson,
who is assistant professor of accounting at the Business School. "We
were interested in whether public accountants really are performing
their role as independent gatekeepers, or has it become a game of
winks and nods between corporate management and the auditors because
the auditors don't want to lose these very lucrative consulting
contracts."
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http://www.financialdirector.co.uk/News/1127156
HSBC had the biggest audit fee in the FTSE-100 for the second year
running, according to the fifth annual survey by Accountancy Age's
sister publication Financial Director magazine.
The bank's fees to KPMG leapt from £12.3m to £17.2m. Significantly,
according to the 2002 survey, Shell T&T has published its audit fee
for the first time in three years, revealing that it paid £11.3m to
KPMG and PwC.
The average audit fee for a FTSE-100 company is now £2.21m, up 17%
from £1.89m in the previous year's survey. Several factors explain
this but the most important is the recent spate of mergers. The coming
together of groups such as Royal Bank of Scotland/NatWest,
Barclays/Woolwich and BP/Arco, alongside the creation of
GlaxoSmithKline, BHP Billiton and HBOS, have created much large
corporations with audit fees to match.
***************
www.dykema.com/finance/news/pubfin0201.pdf
NEW SEC RULES ON PROXY STATEMENT
DISCLOSURE OF AUDIT FEES |
