Tax

2003 Tax Fees: $1.1 Billion and Counting

These fees accounted for roughly 23 percent of the $4.8 billion that companies paid their auditors, based on proxies filed to date.
Stephen TaubJuly 21, 2004

The nation’s largest companies shelled out at least $1.1 billion to their accounting firms last year for tax services, reported Dow Jones, citing figures from the Investor Responsibility Research Center.

That’s not a final total; according to the report, the IRRC pulled these numbers from the proxies filed by the 1,246 companies in the Standard & Poor’s 1,500 that have already held their 2004 annual meeting. Once all of the year’s proxies are filed and the research firm completes its analysis, the total tax fees will no doubt surge much higher.

The Big Four firms reaped 99.7 percent of that $1.1 billion, noted Dow Jones, which cited the IRRC. These tax fees accounted for roughly 23 percent of the $4.8 billion that companies paid their auditors overall in 2003, according to the wire service.

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It’s hard to compare these figures with prior years since this is the first year that companies are required to offer additional details about the fees they pay to their auditors under new rules mandated by the Sarbanes-Oxley Act.

The study dovetails with prior research from the IRRC, which showed that audit fees now account for an average of about 58 percent of total fees charged by accounting firms.