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Audit fees in the public sector

Our audit fees are used as a benchmark for maintaining reasonable fees among all the audit service providers who do work for the Auditor-General.

We carry out annual audits for the Auditor-General. By law, the Auditor-General is responsible for auditing the financial statements of each public entity each year.

New Zealand’s public sector is made up of about 4000 individual public entities (including about 2500 schools). Each public entity pays an audit fee for the annual audit. Fees are set to be fair to public entities and still provide a fair return to the appointed auditors for the work they do.

The Auditor-General is responsible for allocating annual audits of public entities to her contracted audit service providers. She appoints auditors from a group made up of  Audit New Zealand and about 50 private sector accounting firms. Most audits are allocated directly to an appointed auditor. But, from time to time, an audit is subject to a competitive tender – in particular, for public entities with a strong commercial focus.

Audit New Zealand operates like a private sector professional services firm. However, it is not a profit-seeking business. It is expected to break even. Its audit fees are used as a benchmark for maintaining reasonable fees among all the audit service providers who do work for the Auditor-General.

The Auditor-General monitors audit fees to ensure that they are based on realistic hours (that is, hours reflecting the nature and extent of work required), an appropriate audit team mix, and charge-out rates in line with market rates. The allocation of audits, and audit fee-setting and monitoring systems are independently reviewed each year to ensure that they are carried out with due probity and objectivity.

Page last updated: 29 October 2013

Setting audit fees

How are audit fees set?

See the Auditor-General's publication on setting audit fees for more information

Read our publications

We have a wide range of resources to help our clients and to explain what we do