Background to the consultation
Current regulations require PSAA to consult on and set the fee scale in advance of the financial year to which the scale applies. A significant proportion of audit work is undertaken after the end of relevant financial year by necessity. Consulting on changes to the fee scale in advance of the start of the relevant year (as the Appointing Person Regulations explicitly require) therefore presents us with significant challenges, particularly when audit is subject to as much change as it is currently. Ideally, we would be able to set fees with the benefit of relatively complete information about all preceding years’ audits.
We consulted in January and February 2021 on the proposed fee scale for 2021/22, following a consultation in November 2020 on improvements to fee variations arrangements. We consulted a total of 526 organisations, including opted-in bodies, contracted firms and a broad range of national stakeholders. The regulations require us to consult:
- all opted in authorities;
- such representative associations of principal authorities as appear to the specified person to be concerned, and
- such bodies of accountants as appear to the appointing person to be appropriate.
Our consultation for the 2021/22 fee scale set out the proposal that fees would be set using the following information:
- 2020/21 scale fees
- plus relevant adjustments for ongoing additional audit work arising from 2018/19 approved fee variations
- plus any adjustments relating to changes in auditing and financial reporting requirements which are classified as national variations under PSAA’s new arrangements for dealing with fee variations and which could be determined before 31 March 2021.
- plus relevant adjustment for inflation arising from PSAA’s contracts with audit suppliers.