The Chinese Government Performance Audit Study

With the social and economic development in western developed countries, government performance audit was initially introduced in the 1940s. Government audit in western developed countries has since entered the stage of emphasizing both performance audit and traditional financial audit but leaning gradually towards the performance audit. Now, performance audit has become a major part of the government audit in many countries and a specialized performance audit system has been established in the U.S., U.K., Australia, etc,.With the deepening of China's political and economic system reforms, government performance audit has been the ultimate direction of government audit in China. Actively conducting government performance audit is the prerequisite of integrating China's audit with the mainstream of world audit and keeping pace with the world audit. It is also currently demanded by China's economic and social development and internally required by the rules of its own development. At present, government audit in China is at a key transitional stage from traditional audit to modern audit. In 2003, China's National Audit Office issued the development planning of its audit work for 2003-2007 and it explicitly required that active effectiveness audit should be attempted and treated this as one of the three major tasks over the next couple of years. In 2006, The National Audit Office issued the development planning of its audit work for 2006-2010 and clearly pointed out the importance of truthfulness, lawfulness and effectiveness audits for fiscal and financial revenues and expenditures. It also committed to allocating about half of its total resources toward the work of effectiveness audit and comprehensively advancing effectiveness audit, with the goal of preliminarily establishing an effectiveness audit system that corresponds with China's basic conditions by 2010. In 2008, The National Audit Office issued its audit plan for 2008-2012 and called for comprehensive advancement of performance audit. In addition, it required that by 2012 performance audit should be implemented every year for all audit projects. What is the status quo of performance audit in China? What are the problems that need to be solved and improved? How much gap is there between China and western developed countries? How to better and quickly promote performance audit in China? All of these are legitimate questions that well worth studying. Therefore, it is theoretically and practically meaningful to study the performance audit in China.This thesis is organized using the following framework:by elaborating the general theory of government performance audit, we explain the meaning, content and characteristics of government performance audit. Based on the analysis of status quo of performance audit in the city of Shenzhen and Wenzhou and the existing problems, we take the advanced experiences in performance audit from the U.S., U.K. and Australia as examples and offer our suggestions for expediting the development of performance audit in China.This thesis is comprised of six parts. The first part is the introduction of the thesis and it addresses the key questions and sets forth the research objectives, significance and relevant literature on the domestic and overseas government performance audits. It also introduces several research approaches adopted in this thesis. Part Two analyzes the theory of government performance audit. Part Three mainly analyzes the status quo of government performance audit in the city of Shenzhen and Wenzhou, along with the existing problems and causes of these problems. Part Four mainly introduces the most mature performance audit systems in the U.S., U.K., and Australia. Based on the comparative analysis of performance audits between China and foreign governments, we obtain the advanced experiences in performance audits from foreign governments and their implications to China. Part Five offers the suggestions and recommendations in advancing government performance audit in China, which include establishing and improving the laws and rules relating to performance audits, reforming the audit system, constructing a comprehensive system of performance audit index, conducting quality control of performance audit, implementing diversified performance auditing approaches and establishing as well as implementing talent strategy for performance audit in China. Part Six concludes this thesis.