Effect of Outsourcing Public Sector Audits on Cost-Efficiency
University of New South Wales (UNSW) - School of Accounting
Edith Cowan University
Keith A. Houghton
Australian National University (ANU) - Faculty of Economics & Commerce; Australian National University (ANU) - Crawford School of Economics and Government
Gary S. Monroe
University of New South Wales (UNSW) - Australian School of Business
Accounting & Finance, Vol. 49, No.4, pp. 675-695, December 2009
This study compares the cost-efficiency of ‘in-house’ and outsourced to private sector audit supplier arrangements to deliver financial audits in the public sector by examining audit cost-efficiency within the context of the public sector arrangement at one state in Australia (Western Australia). The results for 178 public agencies show that outsourced audits are, in general, more costly than in-house audits, but this result is conditional on the type and size of public agency. Specifically, outsourced audits are more costly than in-house audits for small statutory authority audits, whereas for specialist audits (i.e. hospitals) and large and complex statutory authority audits, the in-house supply is equally efficient as the outsourced service.
Number of Pages in PDF File: 21Accepted Paper Series
Date posted: November 24, 2009
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