Desertation thesis deals with the evaluation of financial statements by the chosen municipality. In the theoretical part are described single steps of financial statements according to valid law standards and professional literature dealing with this issue. It relates to preparatory work, final accounting operations, reporting, and of course, all obligations connected with it, like for example review of economy, approval and release of the financial statements. Practical part contains the check of correctness of the process of financial statements by the chosen municipality based on theoretical starting point. In the conclusion are evaluated results and also suggested recommendations for improving the process of financial statements.