The bid rates submitted in response to PSAA’s 2022 audit services procurement, covering the audits of 2023/24 to 2027/28, required a significant increase in audit fees compared to our previous procurement in 2017. The factors that led to this increase principally relate to increased audit requirements and a less competitive local audit market.
In consulting on the fee scale each year, we consider the factors which may influence the audit work needed. This starts with the existing scale fees and may also include changes in audit requirements, for example revised auditing or financial reporting standards. It may also reflect changes in the local circumstances of individual audited bodies.
If the volume of audit work changes, then the total fee will vary accordingly. For example, if a national or local factor triggers an increase or decrease in the volume of audit work then the fee will change. For audits from 2024/25, the audit contracts also require us to consider changes in inflation.
We understand that an increase in audit fees poses a significant funding challenge for local bodies already facing a daunting range of financial pressures.