|Midsized Companies Head to Regional Audit Firms as Mid-Tier Auditor Rates Catch - and Surpass - Big Four|
ARLINGTON, VA.--(BUSINESS WIRE)--May 22, 2008--Corporate Executive Board (NASDAQ: EXBD) announced today that a recent study on external audit fees conducted by the Finance Leadership Exchange (FLEx) - a Corporate Executive Board program for CFOs at midsized companies - found that recent promises of lower rates at mid-tier audit firms have not materialized. The study, with responses from more than 100 CFOs, suggests that many midsized companies are leaving Big Four and mid-tier auditing firms in search of lower rates and better service at smaller, regional firms.
CFOs that participated in the FLEx study were asked to provide data on their hourly blended rates, total integrated external audit fees, number of key controls, and the name of their external auditor. The results indicated that hourly rates at mid-tier firms are even higher than most of the Big Four, which has caused many of these midsized company CFOs to move to regional firms.
"In addition to economical factors, we talk with many CFOs who are moving to smaller, regional audit firms for improved service," said Cameron Doolittle, Senior Director of FLEx. "In the words of one of our members, 'The Big Four' sends me the least experienced auditors each year, and I have to start from square one explaining how our business works. I found a local firm, and they're doing a great job."
The FLEx study also found that the median midsized public company pays 0.27 percent of its revenue in external audit fees, while a median private company pays 0.13 percent. Annually, a $300 million company pays for 4,300 audit hours per year, and an identical private company pays for 1,700 hours. Among public companies, regulated industries like utilities and health care buy the most hours (medians of 7,181 and 6,500 respectively), while manufacturing companies buy the least (2,011).
For additional information or breakdown of external audit fee hourly rate benchmarks for various auditors, revenue sizes, and industries, contact Joni Renick at the Corporate Executive Board.
About Finance Leadership Exchange
The Finance Leadership Exchange (FLEx) - a program of the Corporate Executive Board - serves nearly 600 midsized company CFOs across North America and Europe providing best practices, tools and templates, peer networks, continuing education, and benchmarking. For more information, please visit www.financeleadershipexchange.com.
About Corporate Executive Board
The Corporate Executive Board (NASDAQ: EXBD) provides analysis and authoritative guidance to the world's most successful organizations. With a member network of over 80% of the Fortune 500, the Corporate Executive Board delivers indispensable resources for timely decision-making on all issues related to strategy, operations and general management. For more information, visit www.exbd.com.
CONTACT: Corporate Executive Board Joni Renick, 571-303-3000 firstname.lastname@example.org SOURCE: Corporate Executive Board