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Internal Audit Cost

Internal Audit Cost

What is a reasonable internal audit cost, including the total internal and external accounting costs for a business, expressed as a percent of total revenue? I particularly would be interested in a restaurant business, but it would be interesting information for any business.

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Internal audit cost is difficult to pin down, it depends on many variables such as volume, type of business (even restuarant business can be segregated), degree and type of computerization, etc.

External costs are more market based driven, as well as sales, services provided (reviewed financials/audited - no one bothers with compilations any more, industry, etc.

So, Mr/Ms Anonymous, can you give us some more specifics?

Howard S. Altholz, M.S., CPA
Title: Accounting Manager
Company: Out-Sourced Controller Services
(Accounting Manager, Out-Sourced Controller Services) |

It's a general question so a general answer would be helpful. I was thinking about 2% of sales with a range of 1.5 to 3%. Do you think that would cover most situations?

Topic Expert
Karoline Mello
Title: Director, FP&A
Company: Apollo Group
(Director, FP&A, Apollo Group) |

For one restaurant, assuming family business and not a chain, a full time bookkeeper or accountant should be hired – salary could be benchmarked by looking at the adds on Career building for that job, restaurant specific, in your area. Also, services of a CPA office can be retained for $500 a month or less depending on the responsibilities, and additional year end fees apply depending on the tax returns and financials that need to be filed.

Why would accounting charges ever be determined as a percentage of revenue, unless you are trying to determine what to charge a client that is in the restaurant business? Most of the time, fees are determined by services rendered, not the success of the business.

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