- Tags : Finance | Audit Services | Price trend | Price forecast | Procurement research | Category market forecast
Recent Price Trend - Audit Services
The price of audit services has been rising at an estimated annualized rate of 0.5% in the three years to 2017. However, rates for services have changed steadily year over year on the back of strong competition among auditors during this period. In particular, auditors have been deterred from adjusting rates for services too rapidly for fear that their clients may defect to competing firms. As a result, buyers have been able to budget accurately for purchases of audit services during the period.
Demand for audit services has grown during the past three years. For example, the number of businesses in the United States has increased as the economy has grown, which has given new enterprises the confidence to commence operations. Ultimately, a greater number of businesses increases the pool of potential firms requiring audits. Meanwhile, government consumption and investment has increased as federal, state and local governments have collectively fared with greater tax revenue. A large amount of these expenditures has been paid to government contractors, many of which have required audits in order to ensure that they have been complying with the terms and conditions of their contracts. Overall, rising demand for audit services has softened competitive pressure among auditors, which has placed upward pressure on rates for services.
Suppliers’ costs have also increased during this period. Auditors require legal counsel in order to avoid expensive litigation from shareholders, regulators or clients stemming from erroneous audits. The cost of legal services has increased on the back of stronger demand for such professional services, which has inflated auditors’ overhead costs. Therefore, vendors have been increasing rates for services in order to reconcile these rising costs.
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