The relation between audit pricing and audit contract type: a public sector analysis Academic Article uri icon

abstract

  • Our study used North Carolina local government data to examine the extent to which audit contract type is capable of explaining the variation in audit fees, after controlling for variables found to be significant correlates in prior audit economics studies (e.g., Z. Palmrose, The Account. Rev. 64 (3) (1989) 494). We used a LOGIT regression model to identify factors associated with the probability of negotiating a particular contract type, either fixed fee or cost-reimbursement. We found evidence that audit fees are, on average, lower for fixed fee contracts than for cost-reimbursement contracts. Also, the probability of negotiating a fixed fee contract increased for governmental units with higher financial risk when they engaged an independent auditor with more knowledge about the public sector. 2001 Elsevier Science Ltd.

published proceedings

  • Journal of Accounting and Public Policy

altmetric score

  • 3

author list (cited authors)

  • Thorne, J., Holmes, S. A., McGowan, A. S., Strand, C. A., & Strawser, R. H.

citation count

  • 9

complete list of authors

  • Thorne, Jerry||Holmes, Sarah A||McGowan, Annie S||Strand, Carolyn A||Strawser, Robert H

publication date

  • January 2001