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The Effects Of Local Government Gaap Regulation On Audit Market Concentration, Auditor Specialization, And Audit Fees, Alfred A. Yebba

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This study examines the effects of financial statement disclosure regulation on auditor market concentration and audit fees. I compare auditor industry concentration rates between municipalities reporting under the Single Audit Act in the state of Michigan, which requires all local governments to follow GAAP reporting, with concentration rates in Pennsylvania, which has unregulated reporting. Using both an interstate comparison as well as examining a policy change in the unregulated environment, I find evidence suggesting that auditor concentration is related to disclosure mandates. Through survey data, I then explore the impact of reporting regulation on audit fees. My findings suggest GAAP …