Audit fees for Sarbanes-Oxley compliance keep rising

Crain's Chicago Business reports:

Despite predictions that audit fees associated with the Sarbanes-Oxley Act would fall, the cost of corporate governance compliance continues to get more expensive for public companies.

Since federal accounting reforms were enacted in 2002, public companies with less than $1 billion in annual revenue have seen audit fees nearly triple in the past four years, according to a recent study by law firm Foley & Lardner. Audit fees were more than $1.2 million for fiscal year 2005 compared to $332,000 before accounting reforms.

In 2004, public companies with less than $1 billion in revenue spent slightly more than $1 million on audit fees, the study showed.

Sarbanes-Oxley was enacted in 2002 to establish financial reporting standards at a time with accounting scandals rocked corporate America. Companies knew first-time costs would be high to implement the requirements, but many industry analysts expected expenses to decline year after year.

A rather dumb law that should be repealed.