The SEC regulators are becoming very “worried” that pressure to reduce auditor fees due to economic cycles could lead to worse audits.
Questions:
1. How do auditor switches impact fees?
2. What legal issues could affect audit committees where auditor fee reductions occur?
3. How does fee-hunting exacerbate this situation?
4. What does the study cited by Kapur say about lower audit fees?
Source:
Chasan, E. (2014). SEC Grows Suspicious of Declining Auditor Fees. CFO Journal, Feb. 24 (Retrievable online at http://blogs.wsj.com/cfo/2014/02/24/sec-grows-suspicious-of-declining-auditor-fees/?mod=djemCFO_h)
Kapur, S. (2014). Falling Audit Fees May Increase Restatements: Study, Feb. 28 (Retrievable online at http://blogs.wsj.com/cfo/2014/02/28/falling-audit-fees-may-increase-restatements-study/?mod=djemCFO_h)
