A Study On The Effect Of Government Audit Function Upon The Value Of The Central SOE Listed Units

As an important component of a country’s political system, government audit is a legal institutional arrangement which is empowered to restrain the use of power through supervision. The essence of government audit lies in the fact that it constitutes an endogenous "immune system" within the macro system of national governance, with functions of prevention, disclosure and resistance. The primary goal of government audit is to promote the development of democracy and the rule of law, achieve good governance, facilitate the healthy development of national economy and society, and safeguard the fundamental interests of the public.China’s government audit office serves as a governmental supervisory organization, which plays an important role in perfection of socialist market economy system and protecting the state-owned assets. With the development and improvement of China’s government auditing announcement system, the auditing reports about state-owned enterprises (hereinafter to be "SOEs") are more and more transparent. At the same time, with the deepening of the SOE reform, SOE become the most important participants in China’s capital market. The government audit, as one of the main body of state governing, is participating in the SOE reform.The research adopts inter-method of normative and positive approach, and its avenues include issues putting forward、theoretic、analysis、views comparison、 investigation and issues solving.This thesis is arranged as followsChapter1:Introduction. This chapter outlines research background, the objectives, the thought of the issues, the methodology, and the framework and writing arrangements. This chapter is overall planning.Chapter2:Literature review. It summaries the relevant literature home and abroad from the following aspects that are the functions of government audit, the audit functions upon the value of the company. This chapter identifies the opportunities of research based on the literature reviews, being prerequisite for the research..Chapter3:System background and theoretical analysis. Government audit raises from the need of strengthening economic supervision, and its basic functions include supervision、evaluation and attestation. Government audit comes from public accountability relation, and serves for it. Based on this, we find the analysis patth in which the government audit functions upon the companies’value. Based on this theoretical analysis, the hypotheses are followed. Analysis of system background ensures the rationality of research methodology, and theoretical analysis supports empirical research, so this chapter is the basis of this thesis.Chapter4:Research design. In the chapter, the author will explain the source and time period of the data in this paper. Also, the selection of variables and the constriction of empirical models are involved in this chapter.Chapter5:Empirical analysis. Through empirical research, the author will perform the government audit functions upon the companies’ value. The empirical result will prove the coherence with hypotheses.Chapter6, It is a concluding section. Main research conclusions are summarized again. The implication of the findings to companies, to government audit office and so on is then carefully discussed. Expected direction for further study comes with the discussion of the limitation of this thesis.Main findings in this thesis are as follows:(1) Research results show that companies are more likely to be audited by the government of poor performance. And also these companies have problems during functioning. Government audit office selects the companies which is to be audited is not casual.(2) Research results also show that the government audit will have a promoting effect on the audit firm’s performance, and through to the improvement of the corporate performance will enhance its companies’value The results show that China’s government audit has a very positive role in promoting the central SOEs to realize the business objectives. Government audit functions have been recognized in the companies’ management.The contributions of this thesis include: Firstly, the author builds a theoretical analysis framework about the effect government audit based on the concept of public accountability on the central SOEs’value. The central goal of government auditing is to promote the development of democracy and the rule of law, achieve good governance, facilitate the healthy development of national economy and society, and safeguard the fundamental interests of the people. The needs of national governance determine the emergence of government auditing. The goal of government determines the direction of government auditing. The goal of governance determines the institutional form of national auditing.Secondly, the author provide empirical evidence of the impact of the government auditing on the central SOEs’ value. There was few empirical researches on government auditing at home and abroad. Despite the limitations of reality such as data availability, it must make up for a lack of empirical research to promote development of the research on government auditing.Thirdly, if we want to promote the development of government auditing research, it must make up for a lack of empirical research. From the perspective of the empirical research it shows that government function upon the central SOE listed units operating performance and promoting the value of the units.