Research On The Impact Of Government Audit On Local Budget Management

The level of the government’s budgetary capacity is an important factor in evaluating whether a country is "well governed" or not.However,since the reform of China’s tax sharing system,the discrepancy between the final account and the budget of the government’s financial resources has been continuously expanding,which is defined by our scholar Gao Peiyong as the budget deviation,which reflects the difference between the budget preparation at the beginning of the year and the final account execution at the end of the year,and is a quantitative reflection of China’s budget management capacity.sound modern budget system",which further clarified the key measures to deepen the reform of the fiscal and taxation system and promote complete and scientific budget preparation,standardized and efficient budget execution,and strict and powerful budget supervision.This thesis therefore examines the level of local budget management and discusses the role of government audits,as an important part of the national supervision system,in regulating government budgeting practices and monitoring budget execution.Based on the theory of fiduciary economic responsibility,the theory of bureaucratic budget maximisation and the theory of "immune system" of national governance,this thesis presents a theoretical analysis of the relationship between the three immune functions of government audits,namely "revealing,defending and preventing",and the deviation of expenditure budgets.Using data from 31 provinces,autonomous regions and municipalities directly under the central government in China from 2013 to 2019 as a research sample,we empirically investigate whether government audits play a role in improving local budget management,and introduce media monitoring and institutional environment as moderating variables to analyse their influence paths and mechanisms of action respectively.The main findings of this thesis are as follows:(1)There is a significant correlation between the three "immune system" functions of government audits and the level of local budget management.Specifically,the stronger the revealing,defensive and preventive functions of government audits,the smaller the deviation from the expenditure budget of the region,and the more conducive to the improvement of the government’s budget management.(2)Media monitoring can play a positive role in moderating the relationship between government audits and deviations from the budget,and the better the media environment,the more media monitoring can facilitate the performance of the audit function.(3)The institutional environment can also play a positive role in regulating the deviation between government auditing and expenditure budget,and the more the institutional environment is improved,the more significant is the suppressing effect of government auditing on the deviation of expenditure budget.Compared to the period before the implementation of the new Budget Law,the institutional environment has a more significant moderating effect on the relationship between the two after the implementation.Therefore,China should continue to deepen the reform of the fiscal and taxation system,strengthen the supervisory function of government audits in the budget cycle process,and enhance the media’s role as an external social monitoring exposure,so that the media and government audits can form an effective interaction.It should also continue to enrich and improve the system related to government budget management,improve the disclosure of financial information,and further improve the level of local government budget management.