The Audit Landscape: 2001-2007

The Corporate Library today has released summary findings from its seminal study of the changes in the audit industry post Sarbanes-Oxley.

“During the period under study, there has been a revolution not only in the type of tasks performed by outside auditors, but also in the fees charged for those tasks…dramatic changes in the audit market during the 2001-2007 survey period. Along with the disappearance of Arthur Andersen, there has been an invasion of the Big Four’s market share by smaller accountancy firms. Off the 3,140 companies tracked, the analysis found that the number of non-Big Four audit firms servicing these companies increased by more than a thousand percent from nine non-Big Four firms in 2001 to 91 in 2006…
…research found that General Electric received the distinction of being the firm with the highest audit costs in 2006, with total fees exceeding $115 million (see table below for details). The company has been jockeying for position with General Motors for highest audit costs over the survey period…

Highest Total Auditor Costs 2001-2006 (Source: The Corporate
Library/Company Filings)

Audit fees as
a percentage
Total auditor of total
Year Company costs auditor costs Auditor
—– —————– —————– ————– —————–
2006 General Electric $ 115,400,000 92.2% KPMG
—– —————– —————– ————– —————–
2005 General Electric $ 109,200,000 92.3% KPMG
—– —————– —————– ————– —————–
2004 General Electric $ 102,600,000 91.3% KPMG
—– —————– —————– ————– —————–
2003 General Motors $ 92,000,000 61.9% Deloitte & Touche
—– —————– —————– ————– —————–
2002 General Motors $ 156,000,000 16% Deloitte & Touche
—– —————– —————– ————– —————–
2001 General Motors $ 102,000,000 20.6% Deloitte & Touche
—– —————– —————– ————– —————–

In 2006 one of the smaller firms — Crowe Chizek — audited more financial services firms than Ernst & Young and the same proportion as PricewaterhouseCoopers.