Study finds audit fees for small public companies increased 96%.

• Position: National

The average audit fees for small public companies--those with less than $1 billion in revenue--increased 96 percent since 2003, according to a study by law firm Foley & Lardner LLP.

The third annual study on the costs associated with corporate governance reform also shows that the average cost of being a small public company increased 33 percent since 2003.

Audit fees accounted for the largest out-of-pocket cost increases, which the study attributes to Sarbanes-Oxley Act Section 404. Audit costs have risen dramatically since FY 2002, the year Sarbanes-Oxley was enacted.

Beyond ballooning audit costs, a significant shift occurred for the first time as lost productivity skyrocketed and the overwhelming majority of public companies reported that SOX had impacted administrative expenses "a great deal."

Other study highlights include:

* The cost of being a public company with annual revenues of more than $1 billion averaged $14.3 million in 2004, an increase of 45 percent over 2003

* SOX impacted administrative expenses "a great deal," according to 70 percent of respondents, up from 54 percent from 2004

* More than 80 percent of public...