Why have auditors fees increased so much over recent years? Post Enron? But Why? Risk?

Question

I have an audit essay to write on the reasons as to why audit firms in the UK have increased their fees so dramatically in the last few years. This is part of a much larger report and requires an answer of no more than 750 words so I will have to be succinct. Help please :)

Answer 1

It's the amount of regulation - the JMU and the QDA.

And all the new Audit Standards requiring more documentation on areas like planning, fraud and risk.

And Money Laundering regulations, Practice Assurance etc

Answer 2

Also, more insurance for increased liability as auditors are held responsible for failed audits.

Yeah, billing rates of auditors went up right after Enron happened.

Answer 3

As demand increases and supply works to catch up, price increases. In addition, if you want a good quality audit, you'll pay for the time and effort.