Publicly traded companies saw their audit fees rise less than 3%last year but they're working to keep an even tighter lid on feesthis year. Public companies paid an average of $3.7 million totheir outside auditors in 2008, up just 2.2% from the previousyear's total, according to a survey of 360 public and privatecompanies conducted by Financial Executives International (FEI).The private companies surveyed, which were generally smaller thanthe public companies, paid average audit fees of $219,500, up 3.7%from 2007. The public company audits on average required 9,881hours of auditors' time last year, while audits of privatecompanies took 1,903 hours.

Executives from public companies are optimistic about theoutlook for this year's audit costs: Just 19.4% expect their auditfees to rise, while 80.6% expect them to come in unchanged orlower, with almost a third predicting audit fees will decline bybetween 2% and 10%. About two-thirds of the executives say they'rebargaining hard with their outside audit firm, while 54.5% saythey're doing more of the work themselves, 9.1% say they'veswitched to a regional audit firm and 8.2% are putting the auditout for bid.

Private companies are less upbeat about this year's costs. Abouthalf of them expect audit fees to increase between 2% and 10%,while 40.4% believe fees will be little changed. And that's despitetheir efforts to tame costs, which in some cases exceed those ofpublic companies. Almost 23% of private companies have put theiraudit out for competitive bids, versus just 8.2% of the publiccompanies, and 20.4% have switched to smaller audit firms, morethan double the portion of public companies that have done so.

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Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.