Local Governments

Local governments include cities, towns, and authorities. These governmental entities are created as a means to provide services to local citizens such as road construction, policing, sanitation, court systems, water and sewer services, electricity, parks, and assistance to the disadvantaged.

Local governments raise revenue from property taxes and transaction fees such as water bills. They also receive federal and state grants.

Most local governments are required by law to have an annual audit. And the audit report is normally available to the general public, creating accountability for how the entity is operated.

The Governmental Accounting Standards Board (GASB) creates the accounting standards used by governments for creation of their financial statements. Auditors audit the governments by determining whether material misstatements are present in the governments financial statements based on GASB’s guidance.