How are audit fees determined?

#1

Am I right in thinking the larger the firm the larger the audit fees?

What other factors are taken into consideration and how in practice is a figure agreed upon by the two parties?

#2

Hi there. Yes i think generally the larger the firm the higher the price they can charge (big 4 obviously won’t be cheap). Sometimes the fees are decided before the audit starts (auditors last year too possibly) but I have known certain clients who take a long time to give important info to the auditors thereby making audits run much longer than necessary. In this case, then i believe the client may be charged using a direct hourly rate calculation for all audit members involved. Hope this helps!