Audit fees: what you should expect to pay
If you’re in need of an audit, you may be wondering about what audit fees you should expect to pay. After all, you want value for money!
While audit fees will depend on a variety of factors, including the size of your company and the auditor you have chosen, it is possible to estimate what you’ll pay for audit services. In this article, we help you understand what’s a fair price to pay for an audit, as well as the kind of service you should expect.
If you’re simply after a competitive quote for an audit, please use our audit calculator to get an instant answer.
What kind of audit do you need a quote for?
Before we delve into how audit fees are calculated, you need to know that we’ll be looking at the costs of two types of audits. These are:
- Statutory audits. These are independent audits that the law says some businesses must undertake each year. These are the most common audits we undertake for our clients.
- Voluntary audits. These are audits you choose to undergo. For example, you might want an audit to help you sell on your business, or the shares you hold in it.
Both of these audits are financial audits. They look at your financial records and determine whether they are likely to be free from material misstatement.
If you’re not sure whether your business needs a statutory audit, you can find out by reading this quick guide: Statutory audit: does my limited company need one?
To learn more about how the two types of financial audit work, this short guide is also helpful: Understanding the purpose of an audit.
How are audit fees calculated?
Audit fees are calculated differently by different audit providers. When providing you with a quote, they have to take a variety of factors into consideration.
- The size of the client. Audit fees are going to be lower for a medium-sized company than they are for a multinational corporation.
- The scope and length of the work. The more complex the audit, the longer it takes and the more it costs. However, most of our audits take in the region of three weeks, with much of that occurring off-site.
- The quality of a company’s financial records. High quality financial records that demonstrate strong internal controls take less time to audit.
- The experience of the audit team. The more experienced an audit team, the higher salary costs are.
While costs can vary between audit firms, most can provide you with a quote based on your turnover. Our audit fees start at a very reasonable £9,735 for firms with a turnover of £7.5 million or less.
How much will an audit cost me?
If you want to know how much THP will charge you for an audit, please use our audit fees calculator to get an instant quote. You could pay as little as 0.125% of your turnover, or less if you have a particularly high turnover.
How transparent are audit fees?
If you choose THP for an audit, we’ll provide you with a transparent breakdown of our audit fees before you sign any agreement. We believe in being open with our clients and ensuring they know exactly how their money will be spent.
Will a voluntary audit cost less that a statutory audit?
Sometimes the scope of a voluntary audit will be less broad than the requirements of a statutory audit. If you’d like to discuss your needs with us, we’d be very happy to provide you with a quote that reflects the work you need doing.
What’s included in my audit fees?
Your audit fees should cover every aspect of an audit. An audit normally has three stages:
Stage 1
Planning
Auditors work with you to agree the scope of the audit, particularly identifying areas of potential risk.
Stage 2
Fieldwork
This is where auditors examine your financial records, assessing them for accuracy, compliance, risk and internal controls.
Stage 3
Completion
You get a detailed audit report, detailing any issues that have been uncovered and providing you with an audit opinion.
You can find more detail on the audit process in our guide, What does an auditor do? However, a good audit will always deliver valuable benefits. The detailed financial information you’ll gain can help you with strategic decision making, lowering the risk of fraud or error, ensuring your records are compliant and increasing stakeholder confidence.
Can fees be increased after an audit starts?
Sometime, audit fees can be increased after an audit starts. However, this is rare. During the audit planning stage, an auditor will agree a scope of work with you. The agreement will also define circumstances in which fees can be increased. These might include being asked to work on an area not covered in the agreement, or avoidable delays caused by the firm being audited (such as not providing financial information in a timely way). When you choose an experienced auditor like THP, it’s rare that fees will need to change after the audit begins.
Are cheap audits worth it?
If you are offered a surprisingly cheap statutory audit, we’d recommend that you are very wary. Auditing is complex and highly regulated work, and experienced auditors bring a lot of value to the audit process. Moreover, in recent years, we’ve seen a growing shortage of auditing professionals, as well as fewer accountancy firms offering audits. At THP, we are lucky to have built up an effective and highly regarded audit team since the 1980s. While our audits tend to cost less than those of major, central London audit firms, we don’t compromise on quality. That’s why our audits, while not cheap, are highly competitive.
Who is allowed to quote for an audit?
If you need a statutory audit, you must get a quote from a firm that’s on the Register of Statutory Auditors. Even if you need a voluntary audit, it’s wise to choose a firm that’s listed here and has the experience and knowledge to provide you with good audit services.
Any questions about audit costs?
As you’ve seen, audit costs can vary depending on factors such as the audit size and scope, as well as company turnover.
At THP, we work hard to offer top-tier audit services at a highly competitive rate. We can do this because we’re established auditors, with a team that’s been serving our clients for over 40 years. Also, with branches in Wanstead, Sutton, Chelmsford and Saffron Walden, we are able to keep our costs lower than major central London firms.
That said, if you have any questions at all about our audit fees, please let us know. We’d recommend you get an online quote now and get in touch if we can help you further. We’re looking forward to hearing from you!
