Establishing a Scientific Outlook on Auditing and Making Good Use of the Role of Audit Oversight

From: English Edition of Qiushi Journal Updated: 2011-09-19 19:36
text size: T | T
Share:

    The National Audit Office in recent years has looked back at its experience and made a scientific analysis of the integral relationship between auditing work and China’s economic and social development. As a result, the Office has called for the application of a more scientific approach to audit oversight, for giving full play to the role of oversight as an “immunity system” and for strongly promoting scientific development of auditing work.

    To firmly establish a scientific outlook on audit, we must understand that auditing work must be guided by the Scientific Outlook on Development, that the audit oversight system is an integral component of the political system of a country, a product of democracy and the rule of law and a means of promoting democracy and the rule of law, an important tool for ensuring the security of the national economy, an “immunity system” that guarantees the healthy operation of the economic and social system of a country, that the ultimate goal of auditing work is to safeguard the fundamental interests of the people and “to promote the rule of law, safeguard the well-being of the people, and promote reform and development.” The primary task of auditing work is to protect the security of the national economy and the state’s interests, promote democracy and the rule of law, and promote all aspects of sustainable development. The basic guiding principle for auditing work is to “audit in accordance with the law, serve the overall interests, focus on the principal task, pay special attention to major tasks and stay pragmatic to seek truth.” 

    The scientific outlook on audit was developed through actual experience. Since China introduced its socialist audit oversight system in 1983, we have followed a principle of building an audit system with Chinese characteristics and constantly worked to better understand its operating rule, essence and functions.

    Our audit departments in their early days were mainly responsible for finding out errors that needed rectification. Only later we came to realize that auditing work plays the role in protecting state assets and realized that auditing work is both the outcome and means of promoting democracy and the rule of law, an “immunity system” that ensures the healthy operation of the national economic and social system. This is a brief summary of our understanding of the function of auditing work at different stages of history and the role of auditing viewed from different angles.

    We may say that correctly implementing the concept of auditing as an immunity system to ensure the healthy operation of the national economic and social system is required by the country’s economic and social development as well as the orientation and focus of our task to further strengthen our audit work. 

    1. Auditing work should be more effective in its oversight role. This function of auditing should keep up with the whole process of financial operations by constantly finding out and exposing irregularities, requiring them to be resolved and working to improve its systems and institutions to promote sound economic and social development.

    First, we must give full play to the function of auditing in prevention efforts. The audit department with its innate power to intimidate should oversee the concrete matters in all fields of society and be independent, objective and just. In this way, it will be capable and responsible in uncovering problems when they are small and trends that could lead to problems so that we will have an early warning of impending problems. 

    Second, we must give full play to the role of auditing in exposing wrongdoings. As provided by the law, the responsibility of auditing work is oversight, which means finding out irregularities for correction. Therefore auditing work must uncover breaches of laws and regulations, economic crimes, economic losses and waste, extravagant spending, abuse of resources, pollution of the environment, encroachment upon the interests of the people, acts endangering state security, disruption of democracy and the rule of law and other disruptive activities, and propose proper measures in accordance with the law, as well as reveal institutional barriers and defects and loopholes in management rules to ensure safe and sound operation of the economy and society. 

    Third, we must give full play to the function of auditing in reducing problems. Auditing not only exposes problems, but even more important, it is supposed to find the causes behind the problems by making an in-depth analysis to reveal the root cause of the phenomena, the general situation behind isolated cases, the general trend of early events, and the general issues behind the specific issues, and to put forth proposals for reforming institutions, perfecting legislation, improving systems, standardizing mechanisms, strengthening management and preventing risks with the aim of improving the quality and efficiency of social and economic operation and promoting sustainable and coordinated economic and social development in a comprehensive way. Therefore auditing work should on the one hand expose and deal with breaches of laws and regulations, thus playing the role of auditing in combating corruption and ensuring a clean government and, on the other hand, play the productive role by paying close attention to major institutional barriers, weaknesses in administrative rules, and helping build institutions beneficial to the scientific development of society. 

    2. We must view auditing work from the overall perspective of economic and social development of the country. The audit department is committed to the task of exercising independent oversight, exposing problems, correcting and dealing with wrongdoings, putting forth constructive proposals, causing government departments to perform their functions still better, ensuring the effective implementation of the policies of the state and ensuring sound economic and social development in accordance with the law. Therefore, the audit department has the important responsibility of ensuring healthy and orderly economic and social development. We must carry out auditing work from the overall perspective of economic and social development of the country, thus making audit oversight a vital link in the promotion of economic and social development and bringing the audit departments and those departments being audited in still closer coordination to play the role as an integrated force. 

    3. We must fulfill the fundamental goal of state auditing. The authority to audit is provided by the Constitution and laws and it is a fundamental goal for state auditing to protect the fundamental interests of the people. To materialize and safeguard the fundamental interests of the people, it is imperative to rely on development and on steady and fast economic growth in the country. The economic security is the prerequisite and precondition for economic development of a country. So long as the national economy is secure, it is possible to bring about smooth and fast economic and social development. Audit as an “immunity system” for healthy economic and social development, therefore, its paramount task must be to ensure the economic security of the country, and while constantly exposing and dealing with major law breaches and other wrong doings, lose no time to follow and closely watch whether the economy is operating safely, where and what the weaknesses and potential risks of the country’s finance, banking, people’s well-being, state assets, energy resources and other departments are, closely watch out for any possible unstable social factors caused by economic issues, promptly submit proposals on countermeasures to help resolve budding issues before they grow into major problems and local issues before they grow into national problems, so that we can strengthen the   “immunity” of the country’s economic and social development.

    Employees of the Auditing Bureau of Qingchuan County, Sichuan Province are at work in a tent at the site of the Wenchuan earthquake. /Photo by Tao Ming, Xinhua reporter

    China’s auditing work is at the primary stage of its development. We must pay attention to theoretical concepts in dealing with practical issues, to new practices and new developments and make continued improvement in auditing work.

    1. Auditing should serve the overall interests of national economic and social development. Auditing must aid in the country’s economic and social development. State audit workers should be highly conscientious in their work to ensure the rule of law through auditing work, to promote socialist democracy and the fight against corruption; they must be highly conscientious in dealing sternly with major law breaches and at the same time helping improve government efficiency and state financial work. They must be highly conscientious to rely on audit to deepen the reforms and promote change in government functions. They must be highly conscientious in their work to rely on auditing work to enhance democracy and the rule of law. Finally, they must be highly conscientious in their work to rely on auditing work to promote correction of problems and standardization of management and the establishment of a system of accountability for officials and its application to assign responsibility to individual officials for specific irregularities.

    2. The audit department must carry out auditing work in accordance with the law and in a realistic and pragmatic manner. (a) It should discover problems, reveal risks and deal with mistakes, thus bringing into play its corrective role. While exposing problems and dealing with wrongdoings, it should put forth more proposals and better measures for handling problems, thus playing its productive role. (b) It should safeguard the economic and social order and protect the interests of the people through exposing and dealing with law breaches and other crimes, and at the same time promote improvement of the institutions and systems and improvement of the legal system in order to provide a platform for better and faster economic and social development. (c) It should pay attention to the overall situation to guide the concrete work of auditing on specific departments and projects, to expose problems and deal with them in accordance with the law and in a practical manner and put forth proposals for improvement. (d) It should bear in mind the development and requirements of the current situation to make timely adjustments of the thinking of auditing work, to improve working methods, to handle problems discovered in the course of auditing, to analyze the causes of problems and to put forth proposals and comments concerning correction of problems. (e) It should work independently, free from outside interferences, within the framework allowed by the Constitution and laws and under the leadership of the administrative leaders of the department to exercise its legal responsibilities and energetically produce public “products” in line with public demand.

    3. Auditing work should be further improved and raised to a still higher level. We should further improve audit mechanisms through innovations and make management of work and the systems of examination, incentive and encouragement and guarantee more scientific. We should further improve the auditing judicial standard system, energetically work in coordination with the legislative to amend the Regulations for the Implementation of the Audit Law and the Regulations for Audit of Economic Responsibilities and further improve the auditing standards and guidelines with Chinese characteristics in order to carry out auditing truly in accordance with the law. We should make innovations in the working methods of auditing, make more efforts to achieve organic integration of auditing of different types and forms, energetically promote auditing in economic affairs, and actively explore follow-up auditing in order to gradually form auditing working styles and methods that are in line with the actual status of the development of the country. We should make innovations in the technology and methodology of auditing, strive to build an on-line auditing network, explore methods for auditing of information systems and build a national auditing data center and databank in order to form audit technologies that comply with the actual conditions of this country. We should make innovations in the management of auditing work, and strengthen its foundation, focusing on the training of more qualified audit workers. We should improve leadership and guidance to local audit offices so that they can help each other, with the advantages of one complementing another, for coordinated development and improvement of the entire audit system.


Note: / Liu Jiayi is the Chief Auditor of the National Audit Office

Qiushi Journal | English Edition of Qiushi Jounrnal | Contact us | Subscription Copyright by Qiushi Journal, All rights reserved