Audit Fees in Malta: What Drives Cost and How to Get Value (2026)

By the EGM Assurance Editorial Team — a team of ACCA-qualified auditors and tax advisors registered with the Accountancy Board of Malta. All our articles are reviewed for technical accuracy by a senior partner before publication.

By the EGM Assurance Editorial Team · Last reviewed April 2026 · 10 min read

“How much will the audit cost?” is one of the first questions every company director asks when commissioning audit services — and rightly so. Audit fees vary considerably between companies, even between businesses of similar size, and the variation is not arbitrary. Specific factors drive audit cost up, others reduce it, and understanding the drivers gives directors a better basis for evaluating quotes and managing their own audit cost over time.

This guide explains how audit fees are determined in Malta, what drives them up or down, what should be in a fee quote, and how to evaluate a proposal beyond the headline number. It is intended for company directors and finance managers who are commissioning, comparing or reviewing audit services — whether for the first time or as part of a regular procurement cycle.

1. How audit fees are determined in Malta

Audit fees in Malta are not set by tariff or regulation — they are negotiated commercially between the firm and the client, based on the time and expertise required to complete the engagement properly. There is no published rate card, and no two audits are priced identically because no two companies present the same audit risk and complexity profile.

That said, audit pricing is not arbitrary. International auditing standards (ISAs) require the auditor to obtain sufficient appropriate evidence to support an opinion. The amount of work needed to do that is driven by specific, identifiable factors — and those factors are what determine the fee. Understanding the drivers helps directors evaluate quotes intelligently and helps companies take practical steps to reduce their own audit cost.

The two principal drivers

At the highest level, audit fees are determined by two things:

• Audit hours required — how much work the auditor needs to do, given the company’s size, transaction volume, complexity and risk profile.

• Mix of staff applied — the seniority and specialism of the team performing the work, which determines the average hourly rate of the engagement.

Reducing either driver reduces the fee. A company with simple, well-organised records reduces the hours required. A company whose audit can be performed largely by trained staff with minimal partner intervention reduces the rate mix. Both are within the company’s influence to some degree, particularly through the quality of records and the level of preparation provided to the auditor before fieldwork begins.

2. What drives audit fees up

Within any given size category, several specific factors push audit fees toward the upper end of the range or beyond it. The most significant cost drivers are:

Number and complexity of transactions

A company with 200 sales invoices a month requires significantly more substantive testing than a company with 20. Audit standards require the auditor to obtain sufficient appropriate evidence — the more transactions, the more sample testing, and the more time required.

Inventory

Inventory is one of the most audit-intensive balance sheet items. Auditors are typically required to attend physical stock counts at year-end, observe counting procedures, and perform extensive testing on valuation. A company with significant inventory — retail, manufacturing, distribution — will pay materially more than a service business with no inventory.

Foreign currency and foreign operations

Companies transacting in multiple currencies, holding foreign bank accounts, or operating through foreign permanent establishments require additional audit work to confirm exchange rate translations, reconcile inter-company balances, and verify foreign tax positions. Multi-currency operations meaningfully increase audit cost.

Group consolidation

Consolidating a group adds materially to audit cost. The parent’s audit must include the consolidation working papers, intercompany eliminations, fair value adjustments at acquisition, and goodwill testing. Group audits also require coordination with subsidiary auditors (or audit work on subsidiaries directly), increasing time and complexity.

Related party transactions

Companies with significant transactions involving directors, shareholders, or affiliated entities require additional audit attention. Each material related party transaction typically requires specific testing to confirm it is appropriately disclosed and on commercial terms.

Regulatory complexity

MFSA-licensed entities, gaming companies, payment institutions and credit institutions are subject to additional regulatory reporting. The auditor must consider regulatory capital requirements, compliance with sector-specific rules, and submit regulatory reports alongside the financial audit. This can significantly increase the audit fee compared to a similarly-sized unregulated company.

Going concern issues

Where the company has weak working capital, recent losses, covenant pressure, or other going concern indicators, the auditor must perform extensive procedures on management’s assessment of going concern — reviewing forecasts, sensitivity analysis, financing arrangements, and post-balance-sheet evidence. This can add materially to the audit fee for the affected year.

Poor record-keeping

This is the single biggest avoidable cost driver. A company with disorganised records, late accounts preparation, mid-audit adjustments, missing supporting documents, or unreconciled balances will significantly extend the audit timeline. Where the auditor is effectively doing bookkeeping work to make accounts auditable, the fee increases substantially. Conversely, well-prepared records can reduce audit fees materially.

3. What can reduce audit fees

Companies that engage proactively with their auditor and prepare well can materially reduce audit cost. Practical steps that demonstrably reduce fees include:

• Provide a clean, fully reconciled trial balance at the start of the audit. Bank reconciliations, debtor and creditor reconciliations, and inter-company reconciliations should all be complete before the auditor arrives.

• Prepare standard supporting schedules in advance: aged debtors, aged creditors, fixed asset register reconciled to general ledger, accruals and prepayments schedules, payroll reconciliation.

• Ensure board minutes for the year are complete, signed and accessible — covering all material decisions, dividends declared, financing arrangements and related party transactions.

• Address prior-year audit recommendations before the current audit starts. An audit that returns to the same control weaknesses every year is more expensive than one where issues are progressively resolved.

• Designate a single internal contact who can answer auditor queries promptly. Audits drag (and cost) when queries go unanswered for days.

• Plan the audit timing to avoid the auditor’s peak season (January–April for December year-ends). Off-peak engagements often attract better pricing and timeline flexibility.

• Keep your accounting framework and software stable. A change of accounting system mid-year typically requires the auditor to perform additional procedures on the data migration.

4. Audit vs review engagement: cost comparison

Where a company qualifies for the review engagement option under LN 139/2025, the cost difference is meaningful. A review engagement is significantly less expensive than a full audit because the procedures involved are materially narrower — primarily inquiry and analytical procedures rather than substantive testing.

However, the cost saving comes with reduced assurance. A review provides limited assurance (the reviewer concludes that nothing has come to their attention to suggest material misstatement) rather than the reasonable assurance of an audit opinion. For companies whose financial statements are used by external parties — banks, lenders, investors, regulators — the cost saving may not justify the reduction in assurance level.

For a small company with no external users beyond the MTCA and MBR, a review engagement is genuinely a sensible cost-effective alternative. For a company with bank borrowing or external investors, a full audit usually remains the right choice even where review is technically permitted.

5. What should be in an audit fee quote

A professional audit quote should clearly specify what is and is not included. Common items to look for and clarify before signing an engagement letter:

• Scope: full statutory audit, review engagement, special purpose audit, or limited assurance engagement?

• Entities covered: standalone or group consolidation? Subsidiaries included or separate engagement?

• transparent or time-based: most Maltese audit firms quote a transparent for the standard engagement, with hourly rates for additional work outside scope. Confirm what those hourly rates are.

• Out-of-scope work: typical exclusions include responding to MTCA queries, dealing with prior-period adjustments, additional fieldwork required by unforeseen issues. Get the scope of out-of-scope clear in advance.

• Additional services: tax computation, tax return preparation, MBR filing assistance, payroll review — are these included in the audit fee or charged separately?

• Disbursements: travel, courier, third-party costs — typically charged at cost on top of the fee.

• Payment terms: many Maltese firms require a percentage upfront and the balance on issue of the audit report. Confirm the schedule before engagement.

• Engagement letter: a formal engagement letter setting out scope, responsibilities and fees is required by ISA 210. If a firm offers to start work without one, that is a warning sign.

6. Should price be the primary criterion?

The cheapest audit is rarely the right audit. A meaningfully under-priced quote often indicates either: a firm cutting corners on procedures (which exposes both the firm and the client to professional risk); a firm with inexperienced staff who will need to be supervised by your team; or a quote that will be supplemented with additional fees once the work begins.

More important factors than price alone:

• Technical competence: is the firm registered with the Accountancy Board and the audit registry? Does it have appropriate professional indemnity insurance? Does it audit other companies similar to yours?

• Sector experience: an audit firm that has worked with companies in your industry will identify issues faster and ask better questions, reducing both audit time and risk.

• Continuity: is the firm able to commit to a multi-year engagement? Frequent auditor changes are expensive (the new auditor needs to learn the company) and can flag concerns to lenders and other stakeholders.

• Communication style: do the partners and managers respond promptly during the proposal phase? This is a strong indicator of how they will operate during the audit itself.

• Independence: the firm must be genuinely independent. A firm that prepared your accounts cannot then audit them — this is a fundamental ISA requirement.

7. Frequently asked questions

Why are audit fees so variable between firms?

Audit fees reflect the time required, the seniority of staff used, the firm’s overhead structure, and the firm’s pricing strategy. Big Four firms have higher hourly rates than mid-tier firms, which in turn are typically higher than small practices. The same audit could legitimately be priced differently by different firms based on these factors. Lower fee does not necessarily mean lower quality — but it does mean lower investment of time, and the tradeoff should be understood.

Can I get a fixed-price quote?

Yes — most Maltese audit firms offer fixed-price quotes for standard engagements where the scope is clear. The quote should be based on a clear understanding of the company’s size, transaction volume, complexity and prior-year audit history. Where the firm has not seen the company’s records, an indicative range with a fixed price contingent on inspection is more realistic.

Does the audit fee include the tax computation and tax return?

Often yes for smaller engagements, where the same firm prepares both. For larger engagements, tax services are often a separate engagement — either with the same firm’s tax team or with a separate tax adviser. Confirm in the engagement letter whether tax is included or separately quoted.

Why has my audit fee increased this year?

Common reasons: the company has grown (more transactions, more material balances); a new accounting standard has come into force (e.g. IFRS 16 leases) requiring additional procedures; new disclosure requirements (such as CSRD or sustainability reporting for larger entities); poorer record quality this year; auditor inflation tracking the wider professional services market. A fee increase should always be explained — ask your auditor for a breakdown.

Can I negotiate the audit fee?

Yes, particularly at the proposal stage. Audit fees are not regulated and competition between firms is real. The most effective negotiation lever is improving the quality of records you provide — firms genuinely price for time, and a well-prepared client costs less to audit. Asking for a discount without addressing the underlying cost driver may produce a small discount but is unlikely to result in a materially different quote.

Does the size of the firm affect the audit fee?

Audit firms operate at different price points based on their cost structures — hourly rates, team size, infrastructure investment, and overheads all vary. Larger firms with more extensive infrastructure typically have higher hourly rates, while smaller firms with leaner overheads can often offer lower rates. What matters more than firm size is whether the firm has appropriate technical capability for your specific audit, the right sector experience, and a fee structure that matches the scope of work required. All firms registered with the Accountancy Board operate to the same International Standards on Auditing — the assurance level delivered is the same regardless of firm size.

Are audit fees tax deductible?

Yes. Audit fees are an ordinary business expense and are deductible against the company’s chargeable income. The actual after-tax cost of an audit fee in Malta is approximately 65% of the headline fee for a fully-tax-paying company — reducing further to as low as 5% of the headline fee for companies whose shareholders ultimately benefit from the 6/7 refund. The economic cost of audit is therefore meaningfully lower than the invoice amount suggests.

What happens if the audit takes longer than quoted?

This depends on the engagement letter. Where a transparent has been agreed for a defined scope, the firm typically absorbs reasonable overruns within scope. Out-of-scope work — typically defined in the engagement letter as adjustments to prior periods, additional MTCA queries, or matters outside the original audit — is charged separately at agreed hourly rates. Major timeline overruns caused by client-side issues (incomplete records, late responses to queries) are sometimes the basis for additional fees, which the engagement letter should make explicit.

Related guides from EGM Assurance

• Statutory Audit in Malta: 2026 Guide for SMEs

• Audit Preparation Checklist for Malta Companies

• GAPSME vs IFRS in Malta: Which Framework Applies

Authoritative references

• International Standards on Auditing (ISAs)

• Accountancy Profession Act (Cap. 281)

• Accountancy Board (Malta) — audit firm registry

Need help? EGM Assurance provides statutory audit services in Malta — partner-led, transparent, on time. Get a quote.

This article is prepared by EGM Assurance for general informational purposes and reflects general guidance on Malta audit pricing as at April 2026. Every audit is priced on its own facts; always obtain a formal quote and engagement letter before commissioning audit work.