Is audit really taking a hit from covid? Or is it just just experiencing collateral effects from the negative impact towards advisory? If the latter, why should it share the negative impact when it doesn’t benefit off the higher profits from advisory? If the former, I guess I don’t have a valid question lol

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My client asked for 30% fee cut. My other client who normally has acquisitions and other transactions, ton of out of scope work, has none this year. Clients are leaving for cheaper firms. So yes. We are taking a hit

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One firm. Advisory helps pull the firm up with higher billable rates and more revenue in good times. It only makes sense that the entire firm takes the hit in bad times.

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No. As in advisory will be contributing less in profit margin this and next year. Most years, it is advisory and consulting work where the firm makes money and distributed it to audit as you need to have a partner to sign a public opinion. Most big 4 firms advisory and consulting businesses would love to get rid of the audit practice. In years like these, things balance out. Audit is becoming a commodity, fees will be lowered, as they should. Automation and offshore will make audit shrink in top line but grow on margin.

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I'm pretty sure they are projecting lower collections on audit fees and less negotiating room for increases, plus a bunch of audit clients either going with cheaper providers or going bankrupt

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*completely guessing

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It’s both. We’re supporting advisory and our fees will be impacted as clients try to squeeze fees. During GFC was like this too.

Whether it’s fair or not, if you were a partner what else could you do? If it’s every division for itself, we’d be in a much weaker position coming out of this.

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My client negotiated a significant fee cut because of the impacts of COVID on their business. I've heard of the same happening on several other Audit clients. Also some negotiations of longer payment terms. Unfortunately, yes this situation is having a big impact.

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Some clients are asking, as noted by EY1, price cuts....but looks, at least based on the info provided to us, that we will be on target...the hit probably is coming next year when the fees and realization goes down.

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