Organizing municipal audit: Contracting out and audit costs in Norway
Journal article, Peer reviewed
MetadataShow full item record
- SAM - Handelshøyskolen 
Original versionJohnsen Å. Organizing municipal audit: Contracting out and audit costs in Norway. International Journal of Public Sector Management. 2021 https://doi.org/10.1108/IJPSM-07-2020-0181
This paper analyses the deregulation of the municipal audit market in Norway, in particular how organization of the service affected audit costs. The paper uses multiple regression analysis of administrative as well as survey data of organizational structure and audit costs from 312 municipalities in Norway in 2012. The introduction of contracting out in the municipal audit market in Norway in 2004 contributed to a reduction in audit fees eight years after the deregulation, compared to the situation four years before the deregulation. The type of audit, mixing inter-municipal co-operation and contracting private auditors, was related to lower costs. This paper contributes by filling some of the gaps in the public sector accounting and public management reform literature by studying the organization and costs of the municipal audit, specifically by including transaction costs, addressing plural governance forms in addition to pure inhouse production, inter-organizational co-operation and market contracting, and by studying long-term effects. The data does not include audit quality and are restricted to one country.