IPO Accounting and Legal Fees: 2015 Update

The average total accounting and legal fees for IPO companies in US markets dropped again in 2015, continuing a downward trend line from a peak in 2013. Average accounting fees in 2015 declined by 23% while average legal fees declined by 16%.

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Audit Analytics previously observed that average accounting fees disclosed by IPO companies decreased moderately from 2008 to 2011, likely related to fee pressure caused by the financial crisis and its subsequent fallout. Then, from 2011 to 2013, accounting fees rose substantially. As indicated in the chart above, average accounting fees peaked to a high of $1.2 million in 2013, but declined by 15% to $1 million in 2014, and then declined another 23% in 2015 to $0.77 million.

Average legal fees for these IPO companies follow a similar, although less volatile, pattern. Legal fees also peaked in 2013, to a high of $1.9 million, and they have also decreased since. But the decrease has been less dramatic: 5% in 2014 and 16% in 2015, down to $1.5 million.

As a percentage of total proceeds from these IPOs, total accounting and legal fees dropped quite a bit in 2015. Rising steadily from 2008 to 2014, they dropped from about 2.5% in 2014 down to close to 1.4% in 2015.

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