Internal Control Reporting Differences among Public and Governmental Auditors: The Case of City and County Circular A-133 Audits
Posted: 27 Jan 2017
Date Written: October 2010
We investigate potential differences in audit reporting outcomes between Circular A-133 audits performed by governmental auditors vs. those performed by certified public accounting (CPA) firms. Specifically, we investigate the association between auditor type and the likelihood of auditor-disclosed internal control concerns. We employ a cross-sectional sample of 13,386 single audit reports of US cities and counties during 2004–2006. In contrast to prior literature, the results indicate that in the post-Sarbanes–Oxley environment, CPA firms appear more likely to issue audit reports that identify internal control concerns than are governmental auditors in the context of Circular A-133 audits. The differences are more pronounced for larger CPA firms.
Keywords: Circular A-133, Governmental Auditors, Internal Controls
JEL Classification: M40, M41, M42, M48, M49
Suggested Citation: Suggested Citation