Additional information
Communications
We have written to each body to set out the calculation of their scale fee based on these elements. The individual 2024/25 scale fees are available from the scale of fees page of our website.
Fee variations process
The nature of audit means it may be necessary for an auditor to carry out more audit work than has previously been required or was planned. PSAA has the power to vary the audit fee payable by a body where it considers substantially more or less audit work was required than envisaged by the scale fee. Where it becomes clear that audit risk or complexity is significantly different from the level identified and reflected in the scale fee, or audit requirements have increased or decreased, the auditor may request a fee variation.
Fee variation requests must be made to PSAA by the auditor using a standard process. We encourage discussions between the auditor and the body to take place as early as possible in the audit cycle, and ideally for the auditor to obtain agreement from the body to the proposed variation before seeking approval. Irrespective of whether the proposed variation has been agreed by the body concerned, we scrutinise every proposal and are responsible for the ultimate determination of every variation. The fee variation is not payable by the opted-in body until PSAA has approved the request.
We obtain updated fee information and supporting evidence on proposed variations from the scale fee from appointed auditors and consider the reasonableness of the explanations provided. For example, fee variations relating to Code changes, regulatory changes or inadequate working papers are potentially valid (subject to individual circumstances and the body’s observations).
Fees are also chargeable when auditors carry out work in line with their other responsibilities, such as considering information provided by third parties, objections or carrying out other investigations.
Further information on the fee variations process is available on our website.
Statement of responsibilities
The statement of responsibilities of auditors and audited bodies sets out the expectations on which scale fees are based. The statement effectively represents the terms of engagement between appointed auditors and audited bodies and summarises their respective responsibilities.
Scale fees are based on the expectation that audited bodies can provide the auditor with complete and materially accurate financial statements and supporting working papers within agreed timeframes. Where a body is unable to fulfil these requirements, local fee variations may be required.
Additional audit costs that arise due to auditors not meeting expectations, for example where members of the audit team are inadequately prepared or where changes in audit teams lead to repeated questions, are ineligible for a fee variation.
Invoicing
Under the audit contracts applicable from 2023/24, payment to auditors is based on milestones linked to audit delivery.
In contrast to the previous contracts, where the auditor invoiced the body each quarter irrespective of delivery progress, the current contracts have four predefined audit milestones, (each attracting 25% of the scale fee), at which point it is permissible for an audit firm to invoice an audited body.
The milestones have been updated for 2024/25 to recognise the arrangements to address the local audit backlog. The four milestones are:
| Milestone | Value | Delivery requirement |
| 1 | 25% | Paid on either prior year draft Auditor’s Annual Report or Opinion issued, but not before 1 December |
| 2 | 50% | Paid on draft Audit Plan production and issue |
| 3 | 75% | Paid on 50% planned hours delivered |
| 4 | 100% | Paid on 75% planned hours delivered |
Contracted audit firms collect fees from bodies as agents of PSAA.
Value added tax
Individual audit fees under the 2024/25 fee scale do not include value added tax (VAT), which will be charged at the prevailing rate, currently 20%, on all work done.
Enquiries
If you have questions about this fee scale please send them to us by email to: workandfeesconsultation@psaa.co.uk.