This study focused on the impact of auditing on the financial performance of kasese municipal council. In this study auditing was the independent variable and financial performance (measured by the revenue growth, profitability, liquidity & solvency factors) was the dependent variable. Primary data and secondary data sources were used. Quantitative methods were used to collect and analyze the data. The study objectives included: To investigate how Auditing affect, the financial performance of kasese Municipal Council, to examine the relationship between Auditing and financial performance of kasese Municipal Council and to establish the contribution of Auditing towards the financial performance of kasese Municipal Council. The quantitative methods like questionnaires were used. The research findings shown by correlation analysis generally indicated that there was a significant positive relationship between the auditing measures and the financial performance (r>.6; p=.000 in all cases). Regression models also indicated that auditing (independent variable) was a better predictor of the variation in the financial performance (dependent variable). The researcher recommended further research into other factors that affect financial performance of kasese municipal council since the regression analysis indicated that only 60.0% variation in the financial performance was accounted for by the independent variable.