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«Kuzbas
state technical university of T. F. Gorbachev», Kemerovo
Particularities
of Chinese audit
Nowadays, China is the largest economic power. In
terms of GDP it ahead of USA. Thanks to the tireless work of the Chinese
government to make that happen, strengthen and improve the economic control,
including an audit.
Audit in China is a tool
of the state financial control of the authenticity, legitimacy and the
importance of budget or financial income and expenses. It is based on the
principles of parity, objectivity, practicality, realism and security secrets.
Audits are conducted
annually by licensed auditors. Representation, tax-exempt, annual audits are
not required. In this case, the audit is necessarily performed at the closing
of a representative office or at another time on a voluntary basis.
Objects of Chinese audit are:
·
Budgetary revenues and expenditures
of the various departments of the State Council, local governments at various
levels and their departments;
·
Financial revenues and expenditures
of the state monetary organizations, enterprises and institutions;
·
Other budget and financial income
and expenses.
For the people's Liberation Army of China has set up a
separate audit rules of the Central Military Commission.
The audit system of China is hierarchical. An example
of this we can result from the Audit Law of the People's Republic of China:
·
Audit institutions shall exercise
supervision through auditing over the budget implementation, final accounts and
other government revenues and expenditures of the departments (including the
units directly subordinate to them) at the corresponding levels and of the
people's governments at lower levels (Chapter III, Article 16);
· Local audit institutions at various levels shall, under the respective
leadership of the governors of provinces, chairmen of autonomous regions,
mayors, prefecture heads and heads of counties or districts as well as under
the leadership of audit institutions at the next higher levels, exercise
supervision through auditing over the budget implementation at the
corresponding levels as well as other government revenues and expenditures, and
submit reports on the audit results to the people's governments at the
corresponding levels and to the audit institutions at the next higher levels
(Chapter III, Article 17);
·
Audit institutions shall determine
their audit jurisdiction on the basis of the audit fiscal and financial
subordination or the supervision and management in respect of their State
assets.
Where a dispute arises over audit jurisdiction between
audit institutions, the matter shall be determined by an audit institution
superior to both disputing parties.
Audit institutions at higher levels may authorize
audit institutions at lower levels to audit the matters under their
jurisdiction as specified in the second paragraph of Article 18 through Article
25 of this Law. Audit institutions at higher levels may directly audit the
major matters under the jurisdiction of audit institutions at lower levels.
However, redundant auditing shall be avoided (Chapter III, Article 28).
A chief audit institution in China is the National
Audit Office (NAO) of the Government of the People's Republic of China,
oversight of audit work throughout the country under the leadership of the
Premier of the State Council. The auditor-General is head of the NAO.
The funds necessary to ensure the functioning of audit
institutions should be included in the budgets of public authorities and
guaranteed by authorities of the appropriate level.
Also the powers of the auditor have its peculiarity.
First of all, he is entitled to require the auditor any documentation and
interview required witnesses.
Audit institutions may issue circulars on the results
of its audit work to the relevant government departments or to make these
results known to a wider public. If it should persist the state and commercial
secret and follow the corresponding instructions of the State Council.
Audit institutions should form an audit team in
accordance with the subject of the audit specified in the plans for the audit,
and must give notice to the clients in auditing 3 days before the audit. After
conducting the audit, the audit team should report to the audit institutions.
However, before submitting a report, they should ask the opinion of the client.
The client, within 10 days from the date of receipt of the audit reports should
send their written comments to the audit teams and audit institutions.
Audit institution within 30 days after receipt of the
audit reports should inform the audit opinion to the respective clients and
departments. The audit decision shall come into force from the moment of its
communication with stakeholders.
If audit institution determines that the client, in
violation of the provisions of this law, transfers, conceals, falsifies or
destroys accounting records, accounting books, accounting statements or other
materials related to budgetary or financial revenues and expenditures,
transfers or conceals illegally obtained assets, the institution has the right
to stop such actions.
If the client has committed one of the acts referred
to in the preceding paragraph and if the audit institution believes that a
responsible person and other persons bearing direct responsibility for the
incident, must, by law, be subject to administrative sanctions, the audit
institution makes a proposal for the imposition of such sanctions. If the case
constitutes a crime, according to law, the relevant legal authority is
conducting a criminal investigation.
China is an excellent example of state capitalism,
properly regulating the process of transfer of state property to a more
efficient and enterprising private owner and street vendors, not forgetting the
strict state control.
Literature
1. Audit Law of the People's
Republic of China. Adopted at the 9th Meeting of the Standing Committee of the
Eighth National People's Congress on August 31, l994 and amended in accordance
with the Decision on Amending the Audit Law of the People’s Republic of China
adopted at the 20th Meeting of the Standing Committee of the Tenth National
People’s Congress on February 28, 2006.