After three consecutive years of decline, audit fees as a percentage of revenue of Independent Auditors increased slightly in 2009, points out a new comprehensive study for Audit Analytics.

However, the research firm says that as with non-audit fees, the uptick is due to a decrease in revenues instead of an increase in fees.  It stresses the fees declined despite the extra work demanded of independent auditors during the same period when more and more companies were required to obtain a auditor attestations required under the Sarbanes-Oxley Act.

In 2002, non-audit fees represented 50.46 percent of the total fees paid to independent auditors by the 2,613 accelerated filers that comprise the research firm's universe. Non-audit fees continued to decline as a percentage of total fees through 2006, reaching a low of 20.29 percent. "This decline seems to have leveled off the following three years," AA notes. In 2009, the audit fees equaled about 20.34 percent of total fees.

The study also found that after six consecutive years of decreases in the cost of non-audit fees as a percentage of their revenue, accelerated filers experienced a slight uptick in 2009, but the uptick is due to a decrease in revenues instead of an increase in fees.

In 2002, the average amount of non-audit fees paid per $1 million of revenue was $388. Since 2002, this figure declined for six years in a row to an amount of $139 for every million dollars in revenue in 2008. In 2009, there was a slight increase to about $145 for every million dollars in revenue. "This increase, however, was due to a decrease in revenue," Audit Analytics stresses in its report.

Altogether, total fees paid dropped from $2.2 billion in 2008 to $2.1 billion in 2009.

The cost of audit fees as a percentage of their revenue also experienced a slight uptick in 2009. But the uptick is due to a decrease in revenues, AA stresses.

In 2004, the average amount of audit fees paid per $1 million in revenue increased from $413 to $601. This increase was due, in large part, to the requirements of Section 404 of Sarbanes Oxley, which required management to evaluate the effectiveness of the company's internal controls over financial reporting.

Accelerated filers were required to provide SOX 404 certifications in annual reports beginning with fiscal years ending on or after November 15, 2004. In addition to the management's certification, SOX 404 required the registered public accountant to attest to and report on the management's assessment. "This new requirement and expansion of scope caused an increase in fees," AA stresses.

Since the initial increase in 2004 and 2005, audit fees trended downward, it adds. "This downward trend has occurred despite the fact that the percentage of registrants that fell under the purview of SOX 404 increased over the years," it adds.

In addition, fees dropped during a period when audit firms lost the supplemental fees earned from non-audit services, AA notes.

After three years of years of decline, there was a slight increase in 2009 when filers paid about $569 in audit fees for every million dollars in revenue. Audit Analytics stresses this was due to a decrease in revenue. Specifically, total fees paid dropped from $8.6 billion in 2008 to $8.1 billion in 2009.

Audit Analytics also points out that in recent years, accelerated filers have experienced a downward trend in audit fees despite the fact that the percentage of companies that were required to adhere to Section 404. It points out that because SOX 404 requirements applied to different categories of accelerated filers at different dates, the number of companies that needed to file an auditor attestation increased from year to year.

In 2004, of 2,613 companies, 1,600 filed auditor attestations. This number increased by 630 companies in 2005 to a total of 2230 auditor attestation filers. In 2006, the number increased by 203 companies to a total of 2433. An increase of 112 in 2007; 28 in 2008; and 34 in 2009 brought to total number of auditor attestation filers to 2607. Therefore, in 2009 all but 6 of the 2,613 companies filed an auditor attestation.

The upshot:  The average audit fee for the research population decreased during a period of increased workload for auditors, according to the report.