This study examines the effects of disclosure regulation on levels of auditor concentration and audit fees. We compare auditor industry concentration rates between municipalities reporting under Circular A-133 in the state of Michigan, which requires GAAP reporting, with concentration rates in Pennsylvania, which has unregulated reporting. We find that the auditing market in Michigan is more concentrated than the market in Pennsylvania. Our study then examines the impact of reporting differences on audit fees. Our regression results suggests that GAAP mandated disclosure results in an overall lower audit fee in Michigan, but specialist firms in Michigan are able to differentiate themselves and earn a fee premium. The state with unregulated reporting has higher overall audit fees for governments reporting under Circular A-133. Our results suggest that specialists operating in the unregulated environment may earn either a fee premium or have discounted fees. Specialist pricing in both markets appears to depend on audit firm characteristics and changes in market share. Collectively, our results provide evidence that regulated reporting results in overall lower fees, but also results in greater concentration and greater specialist fee premiums.