The introduction of price competition in a municipal audit market

Kevan L. Jensen, Jeff L. Payne

Research output: Contribution to journalArticlepeer-review

28 Scopus citations


We examine the effects of deregulation that introduced price competition in a municipal audit market. In 1993 Florida removed the competitive bidding restriction that prohibited disclosure of pricing information in the initial stages of auditor selection. This change led to significant shifts in the audit market from Big 6 firms toward established non-Big 6 firms in the municipal market and reduced audit fees. If quality increases with auditor office experience in a given industry, then our results also suggest that the primary effect of introducing price competition was to make quality audits more affordable.

Original languageEnglish
Pages (from-to)137-152
Number of pages16
Issue number2
StatePublished - Nov 2005


  • Audit fees
  • Audit market regulation
  • Audit quality
  • Price competition

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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