Government Audit Quality and Efforts to Improve Internal Controls: A Case Study in Tennessee

Abstract

With national government audit quality concerns mounting, we utilized data from the Federal Audit Clearinghouse (FAC) to evaluate the variation in local government audit findings in Tennessee compared to other states. The combination of a centralized state audit agency which conducts some local government audits directly and monitors others and the implementation of legislation requiring internal controls result in more rigorous audits and stronger internal control systems in Tennessee local governments, providing a model that should be considered by other states.