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Procurement of audit services in the municipal sector: the impact of competition

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  • Torbj�rn Tagesson
  • Nicoletta Glinatsi
  • Martina Prahl

Abstract

This paper examines the extent to which price is the determining factor in the procurement of audit services. In Sweden, 72% of municipalities chose audit firms with the lowest bid. Both political competition and competition between audit firms were found to affect whether price was the decisive criterion or not.

Suggested Citation

  • Torbj�rn Tagesson & Nicoletta Glinatsi & Martina Prahl, 2015. "Procurement of audit services in the municipal sector: the impact of competition," Public Money & Management, Taylor & Francis Journals, vol. 35(4), pages 273-280, July.
    • Handle: RePEc:taf:pubmmg:v:35:y:2015:i:4:p:273-280
    DOI: 10.1080/09540962.2015.1047270
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    References listed on IDEAS

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    1. Sheila Ellwood & Javier Garcia-Lacalle, 2012. "New development: Local public audit—the changing landscape," Public Money & Management, Taylor & Francis Journals, vol. 32(5), pages 389-392, September.
    2. Copley, Pa & Gaver, Jj & Gaver, Km, 1995. "Simultaneous Estimation Of The Supply-And-Demand Of Differentiated Audits - Evidence From The Municipal Audit Market," Journal of Accounting Research, Wiley Blackwell, vol. 33(1), pages 137-155.
    3. Gaver, Jennifer J & Gaver, Kenneth M, 1995. "Simultaneous Estimation of the Demand and Supply of Differentiated Audits," Review of Quantitative Finance and Accounting, Springer, vol. 5(1), pages 55-70, March.
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    5. Verba, Sidney & Schlozman, Kay Lehman & Brady, Henry & Nie, Norman H., 1993. "Citizen Activity: Who Participates? What Do They Say?," American Political Science Review, Cambridge University Press, vol. 87(2), pages 303-318, June.
    6. Lynn A. Johnson, 2001. "An investigation of pricing behavior in the municipal audit market," Accounting Forum, Taylor & Francis Journals, vol. 25(1), pages 89-101, March.
    7. Daniela Argento & Giuseppe Grossi & Torbjorn Tagesson & Sven-Olof Collin, 2010. "The 'externalisation' of local public service delivery: experience in Italy and Sweden," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 5(1), pages 41-56.
    8. Deis, Donald Jr. & Giroux, Gary, 1996. "The effect of auditor changes on audit fees, audit hours, and audit quality," Journal of Accounting and Public Policy, Elsevier, vol. 15(1), pages 55-76.
    9. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
    10. Zimmerman, Jl, 1977. "Municipal Accounting Maze - Analysis Of Political Incentives," Journal of Accounting Research, Wiley Blackwell, vol. 15, pages 107-155.
    11. DeAngelo, Linda Elizabeth, 1981. "Auditor size and audit quality," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 183-199, December.
    12. Collin, Sven-Olof Yrjö & Tagesson, Torbjörn & Andersson, Anette & Cato, Joosefin & Hansson, Karin, 2009. "Explaining the choice of accounting standards in municipal corporations: Positive accounting theory and institutional theory as competitive or concurrent theories," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 20(2), pages 141-174.
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    Cited by:

    1. Pierre Donatella & Torbjörn Tagesson, 2021. "CFO characteristics and opportunistic accounting choice in public sector organizations," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(2), pages 509-534, June.
    2. Linus Axén & Torbjörn Tagesson & Denis Shcherbinin & Azra Custovic & Anna Ojdanic, 2019. "Does municipal ownership affect audit fees?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(3), pages 693-713, September.

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