Accountancy firms have emerged as surprise long-term beneficiaries of the Sarbanes-Oxley Act, as US-listed companies have been forced to pay their auditors larger fees to comply with tough corporate governance rules, according to a new study.
The findings, in a report by Foley & Lardner, a law firm, confound predictions that US groups would only face a one-off increase in audit fees and other costs as a result of the legislation, introduced after scandals such as Enron.
They also dispel accountancy firms' fears that Sarbanes-Oxley's strict requirement for auditor independence, which contributed to the demise of Andersen, would hurt their business by depriving them of fees for non-audit work.
US-listed companies paid auditors on average $4.9 million (€3.88 million) in 2005, 3 per cent more than in 2004 and 11 per cent more than they did in 2001, the year before the passage of the act, according to the study that analysed public findings from more than 850 listed companies in the US.
The rise in total fees came in spite of a dramatic fall in non-audit fees as companies hired third-party consultants to avoid conflicts of interest.
