Audit regulation such as mandatory audit firm rotation (MAFR) has delivered mixed results in the UK, and at the same time, has forced up audit costs for the FTSE 100—with audit fees jumping a whopping 10% to almost $1bn ($935m) in the last 12 months. These were the lead finding of a new Source Global Research report, which we’ve just launched.

The report was featured widely in business news, including in The Times, economia, Accountancy, and Bloomberg Tax. We also prepared two industry viewpoints, which were covered on the day of the launch.

The Source report also found that while MAFR has massively shaken up the landscape of some of the world’s biggest audit markets, it has had very mixed success in terms of achieving the following goals:

• Reducing the dominance of the Big Four
• Increase competition
• Improve audit quality
• Shrink the share of non-audit work performed by audit firms

 Edward Haigh, Director of Source Global Research, said in the report press release:

“Given that competition is increasing, one would expect fees to fall. But average fees are actually moving up at this very high end of the market. And it’s not regulation-light outliers driving those numbers up: For example, the UK’s FTSE 100 see a high degree of audit firm turnover while fees have jumped 10% over the last year. Compare that to the far more modest 5% increase seen in the MAFR-free US market.

Regulation isn’t really achieving what it is set out to achieve. Competition remains between the Big Four, and this is having the unintended consequence of pushing up fees—in part because these firms are spending much more time pitching for work.”