This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Citing Articles via Scopus Google Scholar Articles by Johnsen, A. Articles by Äsland, D. Y. Search for Related Content Social Bookmarking                         What's this?

Contracting Out Municipal Auditing

Conceptual Framework and Assessment

Oslo University College, Norway, aage.johnsen{at}oks.hio.no

Karl Robertsen

Agder University College, Norway, karl.robertsen{at}hia.no

Dag Yngvar Äsland

Agder University College, Norway, dag.y.asland{at}hia.no

This article evaluates the contracting out of municipal auditing. It draws upon the organizational economics (theory of the firm) tradition, specifically agency theory and transaction cost analysis. In order to systematically assess the effects of contracting out municipal auditing, a conceptual framework of municipal auditing is developed. Some empirical evidence is then discussed in relation to this framework. In general, enhanced competition and contracting out municipal activities seem to lead to an increase in both cost-efficiency and effectiveness. However, there are potential problems related to market contracting of municipal auditing, i.e. the prospect of reduced auditor independence, reduced audit quality and in particular less performance auditing. Finally, the article presents suggestions for future research, indicating the need for further empirical studies, especially on how the contracting out of municipal auditing affects auditor independence and performance auditing, and how mixed ownership/plural governance structures affect audit outcomes.

Key Words: auditor independence • audit quality • local government • organizational economics theory • performance auditing

Evaluation, Vol. 10, No. 3, 305-326 (2004)
DOI: 10.1177/1356389004048280


CiteULike    Complore    Connotea    Del.icio.us    Digg    Reddit    Technorati    Twitter    What's this?