Jurisdictional differences in contracting out GBE audits: The impact of audit pricing

Authors

Colin Dolley, Edith Cowan University
K Houghton
C Jubb
M Chong Kar

Document Type

Journal Article

Publisher

Australian Society of Certified Practising

Faculty

Faculty of Business and Public Management

School

School of Accounting, Finance and Business Economics

RAS ID

476

Comments

Houghton, K. A., Dolley, C., Jubb, C. A., & Chong, K. M. (2002). Jurisdictional differences in contracting out GBE audits: the impact on audit pricing. Australian Accounting Review, 12(28), 50-57. Available here

Abstract

This paper examines audit costs for government business enterprises in various Australian jurisdictions, focusing on whether contracting private-sector suppliers induces competitive pricing and hence lower-priced audits. One jurisdiction (New South Wales) is shown to have low levels of contracting-out. It is argued that this lowers price competition and therefore, we predict, audit costs in NSW will be higher than elsewhere in Australia. An empirical comparison shows that, controlling for other factors, NSW is statistically significantly more expensive than other Australian jurisdictions. Alternative explanations relating to variation in audit quality, jurisdiction differences and relative cost are also discussed.

DOI

10.1111/j.1835-2561.2003.tb00211.x