Audit fees surge after SOX - Survey Says - impact of Sarbanes-Oxley Act - Brief Article

California CPA, July, 2003

As the Sarbanes-Oxley Act begins to be implemented, some effect already is being felt.

Auditing fees soared 27 percent on average in the last year for companies in the Standard & Poor's 500 index, according to law firm Foley & Lardner, which tracks such fees.

The firm found that fees are increasing four times the typical yearly increase. For example, Georgia Pacific, a paper and forest products firm, saw its 2002 audit fees rise $18.7 million, to $20.9 million; Pharmaceutical company Bristol-Myers Squibb saw its audit fees more than double last year; and gold-mining company Newmont found its audit fees quadrupling to $4.1 million.

But the findings come with a caveat: Both Georgia-Pacific and Newmont had been Andersen clients, and paid the extra fees to ensure its past books were clean.