Audit and audit-related fees constitute 93% of fee income paid to accountancy firms in Ireland in 2018

Dec 17, 2019

Chartered Accountants Ireland today published new research showing that 93% of fee income from Public Interest Entities (PIEs) relates to audit and audit-related work.

Chartered Accountants Ireland’s Auditor Independence in Ireland research examined the annual reports of Ireland’s 17 largest PIEs (companies with transferable securities listed on EU regulated markets, credit institutions, insurance undertakings or entities with significant public relevance), each of which is audited by one of the “Big Four” accounting firms (KPMG, PwC, Deloitte and EY).

Audit and audit-related fees constituted 93% of fee income that came from PIEs, whereas the remaining 7% was paid to the Big Four accountancy firms for non-audit services such as reviewing financial statements, tax advisory services, etc.

Audit tenure

The research also highlights that eight of the 17 PIEs examined in the report have changed their auditor in recent years, often well in advance of the 10-year legal maximum for an audit tenure. Three more PIEs are currently in the process of changing and have appointed, or are about to appoint, different auditors for years ending after 2019, while four are newly listed and so are not yet required to change auditor. Two have yet to reach the end of the mandatory rotation period under transitional provisions. 

For further information, a link to the research can be found here. (https://www.charteredaccountants.ie/knowledge-centre/guidance/public-policy/publications )

Speaking about the research, Brian Keegan, Director of Public Policy and Taxation at Chartered Accountants Ireland, said: “Businesses and the public have long relied on reputable and unbiased audits as a critical element of commercial success. Unfortunately, however, audit firms are often perceived as compromising their objectivity by generating significant fee income from advisory and consulting services. However, this perception is clearly not substantiated by the research. As well as this, auditors in Ireland are operating in a market where there has been positive and early adoption of EU regulations, which should further assure the public of auditor independence.”

About the survey

Chartered Accountants Ireland’s Auditor Independence in Ireland survey reviewed the annual reports of the 17 largest public interest entities (PIEs) in Ireland, focusing on figures disclosed for audit and audit-related services and for non-audit services. The research examined those parts of the annual reports that tabulated data under a variety of headings, including “Auditor’s fees”, “Statutory auditor’s remuneration”, “Audit and Non-Audit Fees”, and others. 

The research assessed compliance by the auditors of these PIEs regarding EU and Irish regulations in two specific areas:

  • The management of the proportion of audit to non-audit work conducted by accountancy firms, and;
  • The management of the tenure of accountancy firms as auditors to PIEs.

 

For reference

Brian Keegan | Chartered Accountants Ireland | brian.keegan@charteredaccountants.ie | 087 234 7329

Karen Jones | Gibney Communications | kjones@gibneycomm.ie | 01 661 0402 | 086 866 4501

Fiachradh McDermott | Gibney Communications | fmcdermott@gibneycomm.ie | 01 661 0402 | 087 655 7070