The main task of the state audit is to increase transparency and better management of public funds, and it is carried out according to the methodology, way of working and procedures established by the INTOSAI auditing standards and the Code of Professional Ethics of State Auditors. The paper analysed the state audit reports of local units of Šibenik-Knin County for 5 cities, 15 municipalities and the county itself in the period from 2010 to 2020. Only 44 opinions were expressed, of which 12 were unconditional, while 32 were conditional opinions. The financial audit revealed irregularities in accounting operations and reporting, income and receipts, and expenditures and expenses. According to the research, the largest number of errors, around 80%, was observed in the area of accounting operations and reporting. The research established that irregularities in the operations of local units in the area of Šibenik-Knin County appeared frequently, especially in the area of financial reporting and expenditures. Also, based on the implementation of the given orders and recommendations, it was concluded that the implementation of the state audit positively affects the level of compliance of local selfgovernment entities with the relevant criteria. In the end, it turned out that there is no difference in the type of state audit opinion regarding the types of local units.