Sep. 2003 Chinese Business Review,ISSN 1537-1506
Volume 2, No.2 (Serial No.3) China Business Review(Journal),Inc.,USA
Some Apocalypses of Legislative
Model National Auditing to China
? Changying Wang Xinyu Ye
Abstract: National Auditing is established to sustain the Superstructure and supervise the economic order. In this article, the relative content and basic characters of Legislative Model National Auditing will be analyzed and
evaluated. Some apocalypses which are useful to the auditing reformation of our country hope to find.
Key words: Legislative model Nation Auditing model Apocalypse
Legislative Model National Auditing is the kind of auditing that the supreme auditing department is subject
to the legislative department, which is independent of administration system. The national auditing of some
advanced countries such as America, Britain, Canada and Australia, etc. belongs to this kind of Auditing model. In
order to know about the characters of this kind of auditing, America Auditing department is exampled to be
1. The Characters of Legislative Model National Auditing
1.1 The law situation and organization of General Accounting Office of American
General Accounting Office which is subject to Parliament is the supreme auditing organization. It is not only
legislative-sustained department, but also is legislator itself. Moreover, it is a powerful supervision organization.
Without control of any parties and without intervention of administration bureau, General Accounting Office has
its own power.
According to the law, the supreme leader of General Accounting Office is Auditor General who is nominated
by president among the listed people that are proposed by Parliament and is appointed after the agreement of
Senate. The tenure of Auditor General is 15 years. Once an Auditor General is appointed, the president can not
depose him. Unless reasonable, the Parliament can not depose him too. The budget of General Accounting Office
is planned and appropriated by Parliament, not being limited by Ministry of Finance, to avoid that its work can not
be done well because of shortage of fund.
The independency of General Accounting Office in terms of organization status, officer appointment and
budget ensure it to perform the function of economic supervision well.General Accounting Office is a titanic
organization which has 16 internal entrances and 3 international entrances.
American is a federal country. The power of the central and the regions is contributed in the Constitution. In
principle, the matters that are governed by the provinces are not intervened by the federal government. So the
power system of American consists of two parts--the central and the regions--which are independent each other.
To conform to this power system, the national Auditing organization consists of the federal supreme government
Auditing organization and the regional government Auditing organization which are independent too. As supreme
government Auditing organization, the regional government Auditing organization is subject to the Parliament
too.So the regional government Auditing organization has strong independency and authorization.
Some Apocalypses of Legislative Model National Auditing to China
1.2 TheTasks and the Power of General Accounting Office
The tasks of General Accounting Office is varied. Among these tasks the audit supervision is the most important, that is the General Accounting Office supervises the conformation with regulation and law of public
fund and economically and effectively use of public fund, affirm or relieve the entrusted public economic
responsibility of government department. The national Auditing departments carry out audit and report problems
to council, which can be as proof for council to promulgate or revise laws and supervise the government. Assisting
legislation is a basic responsibility of Legislative Model National Auditing. In addition, Legislative Model
National Auditing departments often take part in establishing or establish directly the rules and standards that
construct the government accounting work.
To ensure General Accounting Office to perform its work smoothly and efficiently, the Parliament give the General Accounting Office rather strong power of investigation and report. The power of investigation and report
is the important insurance for General Accounting Office to service for the Parliament, depend on the Parliament,
affirm its authority, strengthen its effect of work..
1.3 The Auditing Scope and Content of General Accounting Office
The auditing scope of General Accounting Office is wide because of so many units which mainly include federal government and its internal and foreign institutions, state owner enterprises, private business and social
institutions that accept imbursement or subsidy of federal government, and other special institutions that accept
the federal fund. In American although General Accounting Office has the power to supervise the regional
government that accept federal government’s fund through audit, the General Accounting Office always require
the regional government to entrust public audit institutions to audit, not Auditing directly, to avoid the Vacuum
phenomenon of supervision because of shortage of audit ability.
The content of auditing supervision is growing varied and further with the scope of federal government’s
activity enlarging, planning projects and public disbursement increasing, auditing scope of General Accounting
Office widening. Summarily, The content of auditing supervision of General Accounting Office includes: Finance
and Legalization Auditing，Economization and Efficiency Auditing.，Result of Projects Auditing ，Administration
Auditing，Social Responsibility Auditing.
That the content of auditing is becoming wider and further is the result of the growing need of legislative institution and the public to strengthen the supervision of the public fund.
1.4 The staff of the General Accounting Office.
The staff of the General Accounting Office is continually adjusted with the enlargement of Auditing scope, deepening of Auditing content, change of Auditing techniques. In 1945, professional audit was required to
government invested companies according to the Act of Control of Government Invested Companies. Conforming
with this act, General Accounting Office began to hire professional accounts, while gradually decrease the amount
of ordinary employees, investigators and lawyers. In 1966, Parliament Institution United Committee require the
General Accounting Office to audit the economic activities or projects of government, collect and gather the
budget information, to strengthen the control of budget. So, the content of audit changed from audit of conforming
with the law and regulation to audit of economization, efficiency and result of projects, and finally to the Social
Responsibility Auditing. In order to perform the comprehensive audit, General Accounting Office hired some
specialists, such as economists, management specialists, engineers, mathematicians, computer specialists, etc. At
present, this kind of specialists has reached 30 per cent of the total staff of General Accounting Office. In addition, General Accounting Office often hire specialists of special institutions such as CPA Firms, Arms Research
Some Apocalypses of Legislative Model National Auditing to China Deportment, Council Companies etc. or ask the technicians of audited units to provide aids in order to improve
audit quality in some special audit, such as Cost-Efficiency Analysis of Arms system, Environmental audit, etc. It
is no doubt that an audit troop consisted of people that have different speciality should be established with the
enlargement of auditing scope and comprehensive work of auditing to ensure the quality of audit and prepare
human resource for Auditing.
2. Some apocalypses of legislative national audit to China
Chinese audit belongs to administrative Auditing in which audit organization is belonging to government
administrative system, and directed by supreme administrative bureau or certain important department (for
example Ministry of Finance). China can learn a lot from Legislative Model National Auditing though the model
of Chinese audit is different from that of Legislative Model National Auditing of American and other developed
2.1 Reform the audit management system of China.
Legislative Model National Auditing is independent from the administrative department which use public
fund, commit entrusted economic responsibilities. And the fund budget is not limited by administrative
department. The appointment of its leader who is responsible to legislative department and report to them is
decided by Constitution, not intervened by administrative department. The independency is useful for it to
perform supervision well. But Chinese auditing can not perform completely with the limitation and intervention of
different parts in organization, economy and behavior. The situation of Chinese auditing is that it is difficult to
audit and to execute, accompanied by lower independency. So it is emergent to solve the problem of independency
for Chinese audit. Chinese auditing system should go the way of legislation, thoroughly solve the basic problem
that affect the auditing independency, that is to change the subjective relationship of audit department to other
administrative department, establish Auditing Administration that parallel to the State Council, the Supreme
People’s Procuratorate and the Supreme People’s Court to report and response to the National People’s Congress
and the Standing committee of the National People’s Congress. Provincial government establish regional Auditing
departments which are responsible directly to the National People’s Congress and the Provincial People’s
Congress and is lead by supreme Auditing institution. The Auditor General is nominate by State Chairman,
decided by the National People’s Congress, and appointed and removed by State Chairman (during the adjourn of the National People’s Congress, appointed and removed by the Standing committee of National People’s
Congress). At the same time the resource of fund is changed. Auditing organization work out draft budget
according the duty, task, plan and standard of fixed number of staff and quota. Then the same level financial
department list it separately in its annual budget without the need of government approval. And the budget is
executed after the approval of the same level the Standing Committee of the Provincial People’s Congress.
2.2 Strengthen the law situation of Chinese audit organization.
The power of auditing, supervision, investigation and report of legislative national audit organization is
ensured by the legislative activity of Parliament. And its audit and supervision is powerful. Because audit
supervision in China is not ensured by strong legislative activity, and audit decision is also difficult to reach, the
responsibility and power should be stipulated through legislative activity to ensure the perform of audit and the
law station of Chinese Auditing organization.
2.3 Define the audit scope of Chinese audit organization.
The auditing scope of national auditing organization should include all the units that have the state-own
Some Apocalypses of Legislative Model National Auditing to China assets. But because of all kind of reasons, the auditing scope of all country does not include all the units that have
the state owned assets. Among these countries that perform Legislative Model National Auditing, the state owned
enterprises in Britain are audited by public auditing institutions, and in America regional government that is
funded by federal government is audited by public auditing institutions which is entrusted by regional government
under the requirement of federal government to avoid the phenomenon of audit Vacuum because of shortage of
audit ability. To resolve this problem China should stipulate the scope that can use the public audit and enlarge
auditing scope by using public Auditing.
2.4 Strengthen the supervision to public audit organization.
After the public auditing was introduced, quality supervision system was established and perfected by
legislative national auditing organization. So China should learn from the advanced experience of legislative style
countries that the quantity, scale and content of supervision to public audit organization should be stipulated in
laws or regulations to shape comparatively perfect auditing supervision system.
2.5 Enlarge the content of audit.
At present the content of legislative style national auditing is changing from traditional financial auditing to
Economization and Efficiency Auditing. And the Administration auditing and Social Responsibility Auditing is
growing gradually. In China the truth, legality and efficiency of fiscal income and expense is the main content of
Chinese Auditing according to the law of auditing. The state auditing can not perform constructing function
because the Achievement and Efficiency Auditing does not perform well, especially the Effect Auditing has not
performed, and the Administration Auditing and Social Responsibility Auditing is not mature. So the of
Achievement and Efficiency Auditing, especially the Effect Auditing and the Administration Auditing and Social
Responsibility Auditing should be concerned by China Auditing organization.
2.6 Improve the quality of auditors, introduce non-accounting, non-auditing staff.
In most Legislative Model National Auditing organization auditors are required to specially educate and train
and have professional certification. The number of engineers, economists, computer specialists and other
Non-accounting staff is 30 percent of the total auditors. In China, the auditors are consist of accounts whose
comprehensive quality is lower. The quality of auditors should be improve and an audit troop which consist of
people that come from different area should be established with the enlargement of audit scope and
comprehensive work of audit to ensure the quality of Auditing and prepare human resource for Auditing.
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