We recognise the importance of councillors and Audit Committees having clear information about the scope and cost of the external audit. PSAA consults bodies and other stakeholders on the proposed fee scale each year. Each body is notified of its proposed scale fee and any body-specific adjustment, and can provide relevant evidence or raise concerns […]
The audit contracts are between PSAA and the appointed audit firms and are managed independently by PSAA on behalf of bodies that opt in to our scheme. Individual councillors and Audit Committees are not directly involved in managing them. However, councillors and Audit Committees have an important role in reviewing the delivery and cost of […]
Scale fees are intended to reflect the audit work required at each audited body. Size and gross expenditure can provide useful context, but they are not the only factors that determine the scope or cost of an audit. The audit work required may also be affected by factors such as the complexity of the financial […]
We recognise that audited bodies consider the total audit fee, rather than the scale fee in isolation. The proposed 2026/27 scale fee includes a 3.0% contractual inflationary adjustment. However, a body’s total fee may also include body-specific adjustments for recurring audit work and fee variations for additional work that is not included in the scale […]
PSAA’s role is to ensure that the proposed fees are evidence-based, transparent and proportionate to the audit requirements. Decisions about whether additional costs qualify for government funding under the New Burdens assessment are outside our remit. Where Government has determined financial support is appropriate, including support relating to rebuilding assurance work and audit firms’ central […]
Additional audit costs may arise where auditors are unable to obtain the information they need in accordance with the agreed timetable. Examples may include delays in providing supporting information, working papers or audit samples, or circumstances where a body is not ready for audit on the agreed timetable. The quality of information provided can also […]
Bodies and Audit Committees should receive from their external auditor a clear and transparent explanation of any proposed additional fee including the additional work undertaken and the reasons it was required. The auditor should explain the nature and scope of the work undertaken, the audit risk, accounting issue or other requirement that gave rise to […]
Yes, PSAA has reduced scale fees where changes in circumstances have reduced the level of recurring audit work required. Examples include where a group entity has been brought back in-house, or where a PFI scheme has ended. Our objective is for scale fees to reflect the audit work expected to be required. Changes in circumstances […]
Where recurring audit work is incorporated into a body’s scale fee, we will record the reason for the adjustment so that it can be reviewed in future fee-setting exercises. Each year we consider information provided by bodies and auditors, including recurring fee variations and specific circumstances affecting individual bodies. We also commission independent technical research […]
It’s important to distinguish between inflation and efficiency expectations. The inflationary adjustment is applied in accordance with the contractual arrangements established when the audit contracts were awarded. It is not an additional increase requested by firms each year; it is a mechanism built into the contracts and applies regardless of individual fee variations. This provided […]