An empirical investigation of audit pricing in the public sector: the case of Greek LGOs

Sandra Cohen, Stergios Leventis

Research output: Contribution to journalArticlepeer-review


This paper investigates the associations between audit pricing and multidimensional characteristics of local governments by using a sample of Greek municipalities. The Greek institutional setting is interesting because it is politically pluralistic. Moreover, independent auditors appointed through a bid process exclusively perform the audits. Our results suggest a considerable variation on audit fees which is mainly driven by politically related factors indicating the importance of relevant theoretical anticipations in audit pricing in the public sector. Agency costs appear strong enough to explain audit pricing. We also confirm prior findings on the significance of audit complexity and size. Results also suggest that audit fees are reduced when an internal team dedicated to accrual accounting is appointed. Therefore, our conclusions offer practical implications for policy setters and regulators in the public sector in relation to audit quality.
Original languageEnglish
Pages (from-to)74-98
Number of pages25
JournalFinancial Accountability and Management
Issue number1
Publication statusE-pub ahead of print - 7 Jan 2013


  • audit fees
  • pricing audit services
  • public sector accounting
  • local governments
  • Greece


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