Risk-based Audit Of Local Government Debt

Financial security has always been the focus of attention of the state.Local government debt is one of the main risk factors affecting financial security.As an important branch of national governance,national audit attaches great importance to local government debt audit,which plays an important role in ensuring financial security,improving the national system and social stability.In order to cope with the financial crisis in 2009,the government adopted the policy of expanding domestic demand and strengthening investment.In order to ensure the completion of public projects,local governments used these financing platforms to borrow money.In 2009 alone,more than 2000 financing platforms were established.For these financing platforms,the government does not have clear provisions to restrict government behavior,and local government debt is not included in the budget,which leads to increased debt risk.In order to control the scale of debt in a safe range,the 12th Five-Year Plan issued by the Audit Office included local government debt audit in the scope of financial audit.In 2011-2013,China carried out a large-scale government audit of local debt to find out the overall situation of debt and the existing debt risks,which promoted the introduction of debt management policies.As of the end of 2014,local government debt has been growing substantially.In addition,the risk of debt repayment and the irregular management of debt funds have also been exposed.In response to the results of the audit,the state issued a new Budget Law to incorporate local government debt into the budget.By the end of December 2017,although the risk is controllable as a whole,there are still some areas beyond the limit,especially a large number of hidden debt risks that have not been clarified.Under the new situation,there are new requirements and new emphasis on the goal of financial audit.In March 2018,China set up the Central Audit Committee.In addition,the Budget Law strengthens the restriction on local government debt,which requires new requirements and new emphasis on the objectives of financial audit.The audit of local government debt should focus more on resolving financial risks,ensuring financial security as the audit objective,paying attention to the risks and irregularities that may exist during the existence of local government debt,and putting forward suggestions for optimizing the management mode of local government debt.Based on the role of national audit in resolving major risks,this paper,from the perspective of revealing financial security risks,deeply analyses the causes of risks and the existing problems in the system,and puts forward pertinent suggestions on how to control financial risks,and effectively resolves financial risks.Taking the local government audit of X city as a case study,this paper makes a detailed description of the basic situation of debt and the specific audit process of X city,finds out the problems existing in the audit process through the description of audit process,puts forward some suggestions to improve the government audit process according to its problems,and starts with resolving major financial risks,pays attention to how the audit exerts national governance.To ensure the safety of economic operation,and to better contribute to the improvement of local government debt audit research.