A third of FTSE 350 companies paid less for their audit last year, marking a slowdown in fee growth after years of steep increases driven by tougher regulation. Total fees paid by FTSE 350 companies to their auditors rose by less than 2 per cent — or about £20mn — between 2024 and 2025, broadly in line with inflation, figures from Ideagen Audit Analytics show. The rise is markedly slower than in previous years.

Audit fees in 2024 for London-listed companies were 75 per cent higher than five years before. In 2025, the proportion of companies securing a reduction in their audit bill was roughly double the previous year. Listed companies have endured years of rapidly rising audit bills and the slowdown could indicate that the Big Four and other accounting firms have largely completed the repricing they argued was needed to meet tougher regulatory standards.

The Big Four firms declined to comment. Some content could not load. Check your internet connection or browser settings.

The rise in fees came despite a letter in 2022 from FTSE 100 chief financial officers to the Big Four firms that warned them to cut costs. Audit firms argued that higher fees reflected the additional work required after a series of corporate scandals including Carillion and Patisserie Valerie prompted the regulator to demand more rigorous audits and changes to the way firms operated. In 2020, the regulator told firms to separate their audit arms from the rest of their businesses by 2024.

Firms passed on the additional cost burden to their clients. The effects of the pandemic and energy price instability also made audits more cost-intensive, industry insiders argue, as the risk of misstatements in companies’ financials increased and distancing restrictions made audits harder to perform. The head of one top 10 accountancy firm said the separation caused audit fees to rise because “the overall take-home from each client” was less. “Then it levelled out and is [now] more on an inflationary increase each year basis,” the head said.

Dean Beale, executive director of the Centre for Public Interest Audit, said that audit quality had improved sufficiently to allow for the “recent plateau” as firms did not need more money to keep improving their services. Some believe that AI will reduce the cost of future audits. Firms have invested heavily in the technology to speed up audits and automate both routine and complex tasks, but it is not yet clear if this will generate savings that are passed on to clients.

One Big Four executive predicted that audit fees could rise again in the near term as audits for companies using AI internally require additional scrutiny. But the executive said those increases were unlikely to last, as clients would eventually expect productivity gains from AI to be reflected in lower audit bills. The head of the top 10 firm said that they “absolutely” expected AI to force audit fees down.

Some clients have already begun making that argument. KPMG last year negotiated lower fees from its own external auditor, Grant Thornton, by contending that AI would reduce the amount of work required. Grant Thornton saw the biggest fall in fees in 2025 across its FTSE 350 book of business, receiving 12 per cent less than the previous year.

Stephen Osborne, audit partner at Grant Thornton UK, pointed out that a change in reported audit fees was not always a change in pricing, as some FTSE 350 companies might have had specific events that affected their fee level. Audits for international companies are also subject to currency fluctuations. “It’s important to look at the individual company context,” he said. Shell saw one of the biggest reductions in fees last year, lowering its payment by more than £6mn, while broker T...