Audit fee disclosre of listed UK companies 2513

  • I am looking for a link to the text of the law, regulation or listing rule that requires listed UK companies to disclose their audit fees and different categories of non-audit fees. Specifically, I would like to find the definition of the various categories and whether the fees only relate to the principal auditor and its network of audit firms (like in the US), just the principal auditor (which is most likely the UK audit firm) without its network of audit firms or all auditors with or without their networks (if the group uses more than one audit firm/network).
    Is it in the Combined Code? Is it available on the web?
    Maybe Denis and WrightLot who are based in the UK can help me on this one.

  • It is a Companies Act 1985 Requirement most recently amended by the The Companies (Disclosure of Auditor Remuneration) Regulations 2005
    You can find the text of it here:
    The disclosures themseleves are fairly simple, in a single limited company the disclosure is of the audit fee and seperately all other fees earned by the auditor; in group accounts this would be a straightforward aggregation of those single company disclosures.

  • Thanks Denis. I checked the Listing Manual and the Combined Code before and did not find anything. I suspected that it might be included in company law. Your link also allowed me to find the regulation that was in force before (
    If I understand the legalese correctly it means the fees paid by the company and its consolidated subsidiaries to the auditor and the auditor’s affiliates (i.e. his domestic and foreign network firms). If there was more than one audit firm then the fees for all firms need to be mentioned.
    I do not know how the big 4 audit firm networks are structured and if the national firms are members of an international ‘association’ or partnership or if their relationships are through a purely contractual franchising agreement, but I guess the spirit of the law was to capture the fees paid to domestic and foreign members of the auditor’s network.
    Do I understand this right?

  • Each of the Big 4 firms is structured differently but broadly national firms are members of an international partnership. Your understanding of the spirit of the law is right.
    if there is more than one audit firm I believe that the disclosure is split along the lines of:

    • audit fees paid to the group auditor
    • non-audit fees paid to the group auditor
    • audit fees paid to the auditor of subsidiary companies
    • non-audit fees paid to the auditor of subsidiary companies
      I haven’t seen a disclosure like this recently so the exact words may not be right but the spirit of it is.

  • Thanks Denis.
    From the form 20-F disclosures of US cross-listed UK issuers, I saw that a large number refers to their audit fee disclosures based on UK regulations and that some of the changed their allocation to the various categories or may have had trouble allocating certain US audit services to the UK categories. I guess the former was because of the change in UK regulations (where I have the two links to the two regulations now). The latter refers to allocating the fee for the audit of internal control over financial reporting and for the reviews of any quarterly reports. Some UK issuers seem to have put the fees for the audit of ICFR into the normal auditing of accounts fee category while others seem to have put it into the other services pursuant to legislation category. While it is an integrated audit of both the financial statements and of ICFR, technically there are two opinions.
    I guess if I add up the audit of accounts (company and subsidiaries) and the other services pursuant to legislation category then it should hopefully be comparable to the US audit fee category (includes audits of financial statements, audit of ICFR and the review of quartery finanical statements).

Log in to reply