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Auditor Expertise: Evidence from the Public Sector

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  • Mark Schelker

Abstract

Public Auditors are fundamental institutions to supervise government agents. Without accurate information principals would find it hard to make adequate decisions. Since agents face strong incentives to misreport, competent audits of financial information are crucial. This paper is the first attempt to study the relationship between auditor expertise and fiscal performance. More competent auditors are more effective supervisors; they reduce the leeway of agents to misreport and improve fiscal outcomes. The empirical results support this hypothesis. I find that States requiring the auditor to hold a professional degree feature significantly lower debt and expenditures as well as higher credit ratings.

Suggested Citation

  • Mark Schelker, 2009. "Auditor Expertise: Evidence from the Public Sector," CREMA Working Paper Series 2009-20, Center for Research in Economics, Management and the Arts (CREMA).
    • Handle: RePEc:cra:wpaper:2009-20
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    References listed on IDEAS

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    Cited by:

    1. Niccol? Persiani & Alberto Romolini & Claudia Galanti, 2015. "Il nuovo sistema di controlli di regolarit? amministrativa e contabile nel Servizio Sanitario Italiano: i Percorsi Attuativi della Certificabilit?," MECOSAN, FrancoAngeli Editore, vol. 2015(94), pages 31-50.
    2. John A. Dove & Courtney A. Collins & Daniel J. Smith, 2018. "The impact of public pension board of trustee composition on state bond ratings," Economics of Governance, Springer, vol. 19(1), pages 51-73, February.
    3. Mark Schelker, 2016. "Unabhängige Finanzkontrolle in der Demokratie," CREMA Working Paper Series 2016-06, Center for Research in Economics, Management and the Arts (CREMA).

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    More about this item

    Keywords

    public auditor; auditor expertise; auditor competence;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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