ABSTRACT
The study aimed at assessing the effectiveness of internal auditing on improving financial management in local government authorities in Tanzania. This study contributes to the theory and policy in that it encourages internal audit to be well staffed and resourced so that it is able to carry out regular audits of the respective governments. This will improve financial management of the local government authorities since it has been established that internal audit has strong positive effect on the financial management. A descriptive research design was employed using 44 respondents who were surveyed employees with questionnaire as data collecting tool.
The study found that Internal auditor’s independence contribute to the financial management improvement (β = 0.651, p =0.001), since internal auditors are permitted to voice their opinions, internal audit is independent in carrying out its responsibilities .Internal auditor’s professional qualification contributes to the financial management (β = 0.251, p = 0.002), as Internal Auditors have appropriate professional qualification in performing their duties, internal audit team has professional experience, skills in governance, risk, and finance. Management support contributes to the financial management  (β = -0.228, p =0.004), as management supports the internal audit function by allotting enough money for the accomplishment of its work plans and permits internal audit staff members to take part in training programs in order to move ahead their skills
The study recommends that the LGAs should ensure motivation schemes of staff to enhance integrity and team work as motivation can help keep employees committed to working hard and contributing as much value as possible to the higher productivity, improved work quality and financial gain across all departments, to ensure that internal auditors are always equipped with relevant audit experience to enable them carry out their activities with confidence, to  keep making investments in capacity-building there by allocate adequate funds for the internal audit function to carry out its activities without compromise and financial hitches.