Discuss the effects and development of Chinese government audit.docx

Discuss the effects and development of Chinese government audit.docx

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DiscusstheeffectsanddevelopmentofChinesegovernmentaudit

DiscusstheeffectsanddevelopmentofChinesegovernmentauditagainstthebackgroundofthecurrentfinancialcrisis

1.Introduction

Thisarticleisbasedonthebackgroundofthefinancialcrisisanditwilldescribetheimpactonthegovernmentauditingofchina,proposetheweaknessofpresentgovernmentauditandwhatlessonscanbegotfromthecrisis.

Theglobalfinancialcrisis causedbytheU.S.subprimemortgagecrisisleadtogreatlossoftheworld.Howtheauditinstitutionstostrengthenitsroletoprotectnationalfinancialsecuritybetter,tomakethegovernmentauditpositioningbetterandtoimprovefinancialsupervisionandregulationhasbecomeapriority.ThedirectinfluencetoChina’seconomywastheassetslossofChineseinvestors,indirecteffectsofthemacroeconomywastomaketheexternalenvironmentmoreserious.Thecrisisnotonlydirectlyledtounstableworldfinancialsystem,butalsoSpedupthecreditcrunch.Alloftheseabovehaveanunhealthyimpactontheworldeconomicrecovery.BecauseChina'sratioofdependenceonforeigntradereachesashighas60%,China'seconomicgrowthalsorelyonexportslargelysofar,sowearesupposedtohighlyconcerntheuncertaintyofthiseffect,takingactivemeasures,andatthesametime,weshouldstrengthenfinancialsupervision,maintainthehealthydevelopmentoftheeconomyinourcountry.Thisneedsauditinstitutionsinterveneassoonaspossibleandplaytheroleof“theimmunesystem”intheglobalfinancialcrisis.

Ontheimpactofinternationalfinancialcrisis,allthecentralgovernment,localgovernmentandthepublicputforwardthenewrequirementsandthoughtstogovernmentaudit.Firstly,howthegovernmentauditdealwiththethreattochina’sfinancialindustry,eventhewholeeconomycausedbythefinancialcrisisactively,safeguardthenationaleconomicsecurityandfinancialsecurityeffectively,revealthesystemicrisk,andassessthefinancialpolicy.Secondly,howthegovernmentauditadapttothechangeofauditingenvironmentanddemand,overcomethedefectsandlimitationsofthemanagementsystem,mechanismandpolicyofgovernmentauditinginthesituationoffinancialcrisis.Thirdly,howthegovernmentauditservetothegovernmentbetter,givetheservicetothedevelopmentofnation'seconomy,playaroleofgovernmentauditpreventively,criticallyandconstructively.

Atfist,thispaperwillprovideadefinitionofthefunctionofgovernmentaudit,includingtheconceptofgeneralfunctionandthemodernfunction.Secondly,whatfunctionofgovernmentauditshouldbeplayedunderthefinancialcrisiswillbediscussed.Thirdly,thispaperwillpointoutthecurrentsituationofgovernmentauditandtheshortcomingstodealwiththecrisis.Lastly,foursuggestionswillbeputtedforwardaboutthedevelopmentofgovernmentauditinthefuture.

2.theroleofgovernmentauditshouldplayagainstthebackgroundoffinancialcrisis

Becausethegovernmentaudithasthefunctionofthemaintenanceofnational

economicsafetyandpreventionofallkindsofcrisismaybehappenedduringthe

economicoperation.However,thefinancialcrisisismostlytheassetbubblescaused

bytheproblemsofnationalmacromanagementlevelthataffectthewholeeconomy

operation.Thereforewhatfunctionofgovernmentauditshouldbeplayedunderthe

financialcrisiswillbediscussed.

（a）Thegovernmentauditshouldhaveafunctionofsupervisiontosafeguardnationaleconomicsecurity

Economicsupervisionistheessentialcharacteristicsofgovernmentaudit.TheeffectofgovernmentauditinthefinancialcrisisisrealizedthroughplayingtheroleofsupervisionandthemainperformanceistoofferDecision-makingbasisformacroeconomicpolicy.Auditinstitutionsisthefunctionofthegovernmentdepartment,acomprehensiveeconomicsupervision.Therefor,itcanholdthefirstmaterialofmacro-economicpolicyimplementationintegrallyandveritablyanditshouldputforwardsuggestionstodisadvantagesofnationaleconomicoperationwithuniversalityandtendentiousness,theinappropriatemacroeconomicpolicymakingandtheimproperuseofmacroeconomicregulationmeans.Theauditingresultsareactuallytheportraitureofmacroeconomicpolicyimplementation.

（b）ThegovernmentauditshouldplayaroleofevaluationtoChina'sfinancialsupervision

Throughsupervisiontothefinancialdepartment,governmentauditmakecommentsonwhethertheregulationsandsystemsetbyfinancialregulatorscanguardagainstbugsoffinancialsystemwell,andwhetherfinancialregulatorscansuperviseaccordingtothenationalmacrofinancialpolicies,lawsandregulationsandtherationalityofmonetarypolicyissuedbycentralbank.AndDalhardt（2002）pointedoutthegovernmentisanimportantparticipantofsocialliferatherthanacommander.Thegovernmentshouldnotonlytryhardtofindoutthepeople’sdemand,butalsoundertakeresponsibility.

（c）Thegovernmentauditshouldapplytheimmunefunctiontopreventcrisis

Financialcrisisstemsfromfinanceandthecombinationofdeteriorationofrisksoftheenvironmentfactorwillformthefinancialcrisisundercertainconditions（Mishkin,1992）.Ifestablishingapreventionsystemthatcancontrolthewholeprocessofcrisis,thenthesafetynetcanmaximizetheeffecttoavoidfinancialcrisis.Thesystemisakindofbeforehandcontrolsystemforthepotentialfinancialrisksorlatentcrisis.Itpredictsthefinancialcrisisthroughrelevanteconomicindicators,especiallyfiscalandfinancialindexandthesystemwillmonitorafinancialcrisiswarningassoonastheindicatorsbeyondsecurityline.Countriescanactivelyarrangeauditinstitutionstofocusonthedevelopmentofindustriesandtheflowoffunds.Throughestablishingascientificandreasonableindexsystem,thegovernmentauditcanfindtheindustryfoamintimeandfeedbacktothebankandsupervisioninstitutionstopreventtheenlargementofthebubbles.

3.Thecurrentsituationandlimitationsofgovernmentaudittodealwithcrisis

Althoughthegovernmentaudithastakenamassofwork,currentsituationofgovernmentauditcannotmeettherequirementsputforwardbyalllevelsofthegovernmentandthepublicandtheexistingdefectsandlimitationsofgovernmentauditaremoreoutstandingunderthebackgroundoffinancialcrisis.Fromthewholesituation,itmainlyexistseveralproblemsasfollows.

（a）Thecoverageofgovernmentauditispartial

Foralongtime,theChinesegovernmentauditfocusonstate-ownedcommercial

banks,althoughitcansupervisethenon-state-ownedfinancialinstitutionsandforeign

banks,securities,insuranceandsupervisionperformanceauditingoffinancial

regulationdepartmentsthroughauditsurvey,theauditsurveyisaveryweakpartof

theauditinstitutionsintheirworkduetothehighdemandsofauditorsanditisthe

specificinvestigationactivitiesbetweentheauditinstitutionsandthecertainmatters

relevanttonationalfinancialrevenueandexpenditures,whichdoesnotbelongto

formalaudittotheagentsthatshouldbeinvestigated（Zhou,Y.RandXin,Y,2011）.So

intheprocessofauditinvestigation,eveniftheinvestigatorshavefoundthe

behaviorsthatviolatethestatefinancialregulations,theycanonlysendreportsto

auditinstitutionsratherthanpunishtheseagents.Thesefactorshavebadimpacton

thedevelopmentofthegovernmentauditingobjectandscopeinevitably

（b）Thegovernmentauditdoesnothavethepreventivefunction

Becausethewaysofgovernmentauditaresingleandmajorityofthemarepost-auditgenerally.Additionally,therearemorereviewingthanprevention.Sothesehaveadeleteriousimpactonfunctionsofgovernmentaudit.Althoughgovernmentauditiswilingtostrengthentheauditqualitymanagement,everyauditingprojectshouldfollowmanyproceduresfromtheprojectplantotheimplementationanddataachievingandsomeauditingitemswilltakeseveralmonthsandauditorsspendmuchtimeongeneralprogramsothatthetimeofsubstantialauditislessthatleadtoinefficiencyworkandfunctionofprevention.

（c）Thegovernmentaudithasnotplayedthefulleffectofsupervisionandrestriction

Atpresent,Chinahasestablishedthebasicmodelofthe‘separateoperationandsupervision’.Asthesametime,thesocialauditingorganizations,internalauditoffinancialinstitutionsimplementinspectionfromdifferentaspects.But‘excessivesupervision’and‘regulatoryvacuum’causedbyrepeatingsupervisionaffectsinternaloperationoffinancialenterpriseandmanagementseriously,alsocausestheinefficiencysupervisionandthewasteofsupervisionresources.

4.Solutionsandsuggestionsofdevelopmentofgovernmentauditinthefuture

（a）Changephilosophy

GeneralAuditorLiuJiayipointedoutthatscientificconceptofauditisformingtheconsensusthatdevotingtotheadvancementofauditingworkatanewideologyheightat2008NationalAuditConference.Thisrequiresustoemployscientificconceptofdevelopmentasguidance,emancipateminds,andunifythoughts,formingtheconsensusofpromotingstableandrapideconomicandsocialdevelopmentandsafeguardingnationaleconomicsecurity.First,weshouldformtheconsensusofservingfortheCommunistPartyofChinaandthecountry'seconomicwork.Secondly,weshouldformtheconsensusofexecutingofactionswhichbreaklawsandregulationsandeconomiccasescluesfirmly,highlightthepointsofauditwork,anddemonstrategovernmentaudit’smonitoringfunctions.Thirdly,weshouldformtheconsensusofimprovingmechanismsystemfirmly,useauditresultstogivefullplayto“immunesystem”functions