Study Of The Government Financial Report Audit Institution In China

The construction of the government consolidated financial reporting institution is an im-portant reform measure to establish modern financial system,promote long-term sustainable development of public finance and the modernization of national governance.As an indispen-sable part of the government consolidated financial reporting institution,the government fi-nancial report audit institution is directly related to the progress and actual effect of the gov-eminent consolidated financial reporting institution.The construction of the government fi-nancial reporting audit institution is of great significance for improving the government con-solidated financial reporting institution,speeding up the construction of modern financial sys-tem and promoting the modernization of national governance system and governance capaci-ty.The current financial audit institution in China is based on the financial management and the government accounting environment before the establishment of the government consoli-dated financial reporting institution,which is to meet the needs of budget control as the core of financial management.Its audit goal is the compliance of the laws and regulations of budg-et revernues and expenditures.Accordingly,its audit focus and methodlogy are also serving the audit goal.This is obviously unable to satisfy the demand of this significant institional transformation,and it also can not meet the new needs of the clients in the context of the ex-pansion of the connotation of the accountability in the field of financial management.By far,the theoretical study of China's government consolidated financial reporting institution only focused on the government accounting and government financial reporting,but ignored the government financial report audit,which could not form a complete research system of the government consolidated financial reporting institution;Meanwhile,the government financial reporting trial work has been carried out for many years and the pilot work has been gradually spread,but the audit practice has severely lagged behind.This paper tries to combine the ac-tual situation of China and the international experiences,and establish a set of theoretical sys-tem of the government financial report audit institution,to form an important supplement to the theory of the government consolidated financial reporting institution and provide theoreti-cal guidance for the government financial report audit practice.The research route of this paper is,first of all,illustrating the government financial reporting and audit institution from the angle of economic theory;and then applying the institution analysis framework to analyse the demand and supply of the government financial report au-dit institution,elaborate the institutional imbalance and influencial factors,and seek for main problems for the construction of the government financial report audit institution;and then based on the international experience,exploring the six elements of the government financial report audit institution,namely,the audit objectives,the audit focuses,the audit methods,the audit organization,the audit technique and the audit standards which can meet the demand and realize the equilibrium state;at last,explaining how to promote the realization of the equilibrium state,or what supporting measures should be taken.This paper is divided into three parts:The first part is the first and second chapters,mainly to put forward the questions.The first chapter is introduction.The second chapter is literature review.These two chapters are the beginning and foundation of the full text.The second part is from the third chapter to the fifth chapter,mainly focusing on the analysis of the economic theory,the supply and demand of the institution and the international experi-ence.The third chapter analyzes the government financial reporting and audit institution from the perspective of the principal-agent theory and game theory,clarifying the functional mech-anism and internal relations of the government financial reporting and audit institution.The fourth chapter uses the institution demand-supply analysis framework to analyze the demand and supply situation of China's government financial report audit institution,pointing out that the current financial audit institution can not meet the audit needs after the establishment of the government consolidated financial reporting institution and the construction of the gov-ernment financial report audit institution is in a state of disequilibrium in which the institution supply lags behind the demand,and then analyzing the deep-seated reasons and key problems of the construction of the government financial report audit institution.The fifth chapter elab-orates the international experiences including practices of the United States,the British and other 11 countries.The third part is from the sixth chapter to the ninth chapter,mainly to construct the institution and formulate the suggestions.The sixth chapter tries to establish the core framework of the government financial report audit institution,and design the three elements,namely,the audit objectives,the audit focuses and the audit methods.The seventh chapter explores the estab-lishment of the implementing system of the government financial report audit institution,and designs the three elements,namely,the audit organization,the audit technology and the audit standards.The eighth chapter expounds and analyzes the government financial report audit related practice of a local audit office which forming the empirical research on the construc-tion of the government financial report audit institution.The ninth chapter summarizes and refines the main points and conclusions,and makes suggestions for how to further promote the establishment of the government financial report audit institution.The main conclusions of this paper include:First,the government financial reporting and audit institution is an arrangement to solve the moral hazard and adverse selection problems of the accountability framework in the public financial management field,which develops with the expansion of the accountability and promote the government to better fulfill its accountability and meet the interests of the princi-pal.Second,the construction of the government financial report audit institution is in an unbal-anced state in which the institution supply lags behind the demand.The key problems of the institution construction are the establishment of the core framework and implementing sys-tem,and also the adoption of positive measures from both top-design level and department level to promote the realization of the equilibrium state.Third,the objectives of the government financial report audit should highlight the material misstatement risk of the government financial report and also the financial risk;The audit fo-cuses must closely follow the audit objectives,and give full consideration to the difference between the consolidated government financial report and the department financial report;The audit methods should be consistent with the audit objectives which requires the risk ori-ented audit method integrating both technical level and strategic level.Fourth,the government financial reporting audit organization should give full play to the joint national audit,social audit and internal audit;It should use big data analysis technique to im-prove audit efficiency and audit quality;the audit standards should be developed based on the international experiences and also the domestic reality.