MANAGEMENT IN GOVERNMENT DIFFERS CONSIDERABLY FROM PRIVATE INDUSTRY. SENIOR MANAGERS DO NOT PARTICIPATE IN FORMULATING POLICY, DECISIONS ARE MADE BY ELECTED INDIVIDUALS OR GROUPS, AND ARE SUBJECT TO POLITICAL CONSIDERATONS. THE DELIVERY SYSTEM FOR GOVERNMENT SERVICES IS PROTECTED FROM DISSATISFIED CUSTOMERS AND BECAUSE OF THE PUBLIC NATURE OF ITS OPERATIONS, EMPHASIZES APPEARANCES RATHER THAN OBJECTIVE MEASURES OF ACCOMPLISHMENTS. IN RECENT YEARS PUBLIC AUDITING FIRMS HAVE INCREASED THEIR BUSINESS IN THE GOVERNMENT SECTOR AND MORE IS EXPECTED DUE TO GOVERNMENT FISCAL PRESSURES AND A NEED TO REESTABLISH CREDIBILITY. COMPETITION FOR GOVERNMENT CONTRACTS IS INTENSE AND BASED ON FORMAL PROPOSALS WHICH ARE EXPENSIVE TO PRODUCE. ALSO, HAVING THE GOVERNMENT AS A CLIENT MAY HAVE UNIQUE CONSEQUENCES. BECAUSE ALL REPORTS MUST BE PUBLIC, THE ACCOUNTING FIRM CAN FIND ITSELF EXPOSED TO THE MEDIA AND POLITICAL PRESSURES. AUDITING PROCEDURES AND RESPONSIBILITIES MAY NOT BE UNDERSTOOD BY THE MEDIA OR THE PUBLIC. GOVERNMENTAL UNITS MAY BE AUDITED BY SEVERAL ORGANIZATIONS, MAKING THEIR PERSONNEL APPREHENSIVE AND DIFFICULT TO HANDLE. PAYMENTS FROM GOVERNMENTS ARE FREQUENTLY IRREGULAR AND DELAYED, AND EXTRA TIME SPENT BECAUSE OF UNEXPECTED PROBLEMS WILL NOT BE REIMBURSED. MOREOVER, BECAUSE OF THE INCREASING NUMBER OF PRIVATE CONSULTANTS EMPLOYED BY THE GOVERNMENT, CIVIL SERVICE MANAGERS HAVE BECOME INURED TO THEIR CONSTRUCTIVE SUGGESTIONS. ALSO, ACCOUNTING RULES FOR GOVERNMENTAL AUDITS ARE ILL DEFINED. THE PRACTICE OF ISSUING QUALIFIED REPORTS IS BECOMING LESS ACCEPTABLE BECAUSE OF CLIENT PRESSURES TO REMOVE ANY BARRIERS TO PARTICIPATION IN THE BOND MARKET. FINALLY, AUDITING IN THE PUBLIC SECTOR IS RISKY, AND ACCOUNTANTS COULD DAMAGE THEIR PROFESSIONAL CREDIBILITY WHILE TRYING TO ASSIST THE GOVERNMENT. (MJM)