Study on the Auditing System of Socialism with Chinese Characteristics Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States With offices in North America, Europe, Asia, and Australia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers’ professional and personal knowledge and understanding The Wiley Corporate F&A series provides information, tools, and insights to corporate professionals responsible for issues affecting the profitability of their company, from accounting and finance to internal controls and performance management Study on the Auditing System of Socialism with Chinese Characteristics CHIEF EDITOR LIU JIAYI Cover image: © Vasko/iStockphoto Cover design: Wiley Copyright © 2017 by John Wiley & Sons, Inc All rights reserved The Commercial Press, China Modern Economic Publishing House, 2016 Translated by WANG Guozhen and YANG Xiaoyu Published by John Wiley & Sons, 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of this book may not be included in e-books or in print-on-demand If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com For more information about Wiley products, visit www.wiley.com Library of Congress Cataloging-in-Publication Data: ISBN 9781119324706 (Hardcover) ISBN 9781119328322 (ePDF) ISBN 9781119328315 (ePub) Printed in the United States of America 10 Contents Preface Introduction About the Systems About the Auditing System About the Auditing System of Socialism with Chinese Characteristics About the Significance of Studying the Auditing System of Socialism with Chinese Characteristics Chapter 1: The Birth and Development of the Auditing System of Socialism with Chinese Characteristics History of the Chinese Auditing System (1) Official Auditing System during the Shang and Zhou Dynasties (2) Censorate Auditing System during the Qin and Han Dynasties (3) Bibu (Court of Auditors) Auditing System during the Tang and Song Dynasties (4) Kedao Audit Supervising System during the Ming and Qing Dynasties (5) Auditing System in the Early Days of the Republic of China and Nanjing KMT Government Period Auditing System during the New Democratic Revolution Led by the Communist Party of China (1) Auditing Exploration during the Establishment of the Communist Party of China and the Great Revolution Period (2) Auditing during the Agrarian Revolutionary War Period (3) Auditing during the Period of the National War of Resistance against Japanese Aggression (4) Auditing during the Liberation War of China xv 1 12 15 15 16 19 21 24 26 28 28 29 31 32 v vi ◾ Contents Establishment and Development of the Auditing System of Socialism with Chinese Characteristics (1) Establishment of the Auditing System in the Early Days of the Reform and Opening-up Period 1) Government Audit System Established Stipulated by the Constitution 2) Establishment of Audit Institutions 3) Thereafter, Audit Work Was Positively Explored and Carried Out 4) Standardization of Audit Work (2) Auditing System in the Period of Transition from the Planned Economy to Socialist Market Economy 1) Continuous Improvement of the Audit Institution System 2) Establishing Professional Auditing System of Various Industries 3) Promoting Framework Building of Audit Laws and Regulations (3) Auditing System at the Establishment of the Socialist Market Economic System 1) Adjusting the Institutional Setting and Reinforcing Audit Independence 2) Preliminary Establishment of the Audit Law System 3) Continuously Enhancing Audit Supervision (4) Auditing System during Improvement of the Socialist Market Economic System 1) Defining Guidelines for Audit Work 2) Building the “3 + 1” Audit Pattern 3) Improving Talents Capacity, Legal Framework, and Technologies 4) Building the System of Announcement of Audit Findings (5) Auditing System during the Overall Building of a Well-Off Society in the New Period 1) Improving the Government Audit Pattern 2) Exploring and Innovating the Audit Methods and Ways 3) Improving the Audit Law System Conclusion and Enlightenment Chapter 2: Foundation of the Auditing System of Socialism with Chinese Characteristics Theoretical Foundation of the Auditing System of Socialism with Chinese Characteristics 35 36 36 37 38 39 40 41 42 45 47 48 48 51 53 54 55 57 59 60 62 63 66 67 73 73 Contents ◾ (1) The Theoretical System of Socialism with Chinese Characteristics Provides the Ideological Foundation for the Establishment and Development of the Auditing System of Socialism with Chinese Characteristics (2) The Theoretical System of Socialism with Chinese Characteristics Guides the Establishment and Development of the Auditing System of Socialism with Chinese Characteristics (3) The Theoretical System of Socialism with Chinese Characteristics Provides the Practical and Theoretical Foundation for the Contents and Arrangements of the Auditing System of Socialism with Chinese Characteristics (4) The Theoretical System of Socialism with Chinese Characteristics Leads the Continuous Exploration and Innovation of the Auditing System of Socialism with Chinese Characteristics, and Guides and Promotes the Development and Improvement of the Auditing System Institutional Foundation of the Auditing System of Socialism with Chinese Characteristics (1) State Political System Determines the Political Nature of the Auditing System 1) CPC Leadership Is the Primary Political Precondition for the Establishment and Improvement of the Audit System of Socialism with Chinese Characteristics 2) The System of People’s Congresses Is an Institutional Guarantee of the Establishment and Improvement of the Auditing System of Socialism with Chinese Characteristics 3) The Unitary State Structure Is the Organizational Foundation of the Establishment and Improvement of Auditing System of Socialism with Chinese Characteristics (2) State Economic System Determines the Duties and Responsibilities of the Auditing System 1) The Basic Economic System with Public Ownership as the Mainstay Determines the Audit Scope and Audited Entities 2) Government Functions under the Socialist Market Economy System Determine Audit Functions Cultural Foundation of the Auditing System of Socialism with Chinese Characteristics (1) Excellent Chinese Traditional Culture Constitutes the Cultural Source of the Auditing System of Socialism with Chinese Characteristics vii 78 79 80 80 84 86 86 92 93 94 95 96 100 100 viii ◾ Contents (2) Socialist Core Value System Determines the Value Orientation of the Auditing System of Socialism with Chinese Characteristics (3) The Socialist Core Value Is the Ideological Force Propelling the Development of the Auditing of Socialism with Chinese Characteristics (4) Core Values of Auditors Are the Dynamic Force for the Improvement of the Auditing System of Socialism with Chinese Characteristics Chapter 3: Basic Framework of the Auditing System of Socialism with Chinese Characteristics Audit Law and Regulations (1) The Constitution of the People’s Republic of China (2) The Audit Law and Other Relevant Laws (3) Regulations for the Implementation of the Audit Law and Other Relevant Administrative Regulations (4) Local Audit Regulations (5) Audit Rules Audit Organization System (1) Establishment of Audit Institutions (2) Relationship between Upper- and Lower-Level Audit Institutions (3) Audit Institutionalization Framework Duties and Powers of Audit Institutions (1) Duties of Audit Institutions 1) Supervision through Auditing Over the Statutory Subject Matters 2) Special Audit Investigation in Terms of Specific Matters Relating to State Financial Revenues and Expenditures 3) Guidance and Supervision Over the Internal Audit Work of Units that are Subject to Supervision through Auditing by Audit Institutions in Accordance with Law 4) Verifying the Audit Reports Issued by Public Audit Institutions for Units That Are Subject to Supervision through Auditing by Audit Institutions in Accordance with Law (2) Audit Jurisdiction System 1) General Principles of Audit Jurisdiction 2) Accountability Audit Jurisdiction System 3) Authorized Audit, Direct Auditing System, and Settlement Mechanism of Disputes Over Audit Jurisdiction 104 106 110 113 113 114 116 118 119 120 123 124 125 126 128 131 131 138 138 139 139 140 140 141 Contents (3) Powers of Audit Institutions 1) Right to Request the Submission of Materials 2) Right to Examine 3) Right to Investigate and Obtain Evidence 4) Right to Adopt Administrative Compulsory Measures 5) Right to Seek Assistance 6) Right to Transfer and Recommend 7) Right to Dispose and Punish 8) Right to Notify or Publish Auditing Results Auditor Management System (1) Professional Requirements for Auditors (2) System for Employment, Appointment, and Dismissal of Auditors (3) Professional Qualification System of Auditors (4) Professional Education System for Auditors (5) Performance Evaluation System for Auditors Audit Operation Mechanism (1) Audit Work Plan 1) System of Strategic Plan on Audit Work (2) Execution of Audit Assignments 1) System of Audit Notification 2) System of Audit Program 3) System of Audit Evidence 4) System of Audit Documentation 5) System of Audit Field Management (3) Audit Results Reporting and Publication 1) System of Audit Report 2) System of Audit Disposal and Punishment and Audit Transfer 3) System of Audit Newsletter, Specific Report, and Comprehensive Report 4) System of “Two Reports” 5) System of Announcement of Audit Results 6) System of Disclosure of Government Information (4) Audit Quality Control 1) Hierarchical Audit Quality Control 2) Mechanism of “Control Review-Assurance Review-Approval” for Audit Report 3) System of Registration and Reporting of Intervention in Audit Work 4) System of Audit Quality Check 5) System of Excellent Audit Project Selection ◾ ix 141 142 142 143 143 143 144 144 144 145 146 148 149 149 150 151 151 151 152 152 153 154 154 154 155 155 156 157 158 159 159 160 161 161 162 162 163 x ◾ Contents (5) Rectification of Problems Disclosed by the Audit 1) System of Rectification by Auditees 2) System of Government Supervision Over Rectification 3) System of Supervising and Assisting Rectification by Relevant Authorities 4) System of Follow-up of Rectification by Audit Institutions (6) Settlement of Audit Disputes 1) System of Applying for Government Ruling 2) System of Applying for Administrative Reconsideration or Instituting Any Administrative Litigation 3) System of Complaint, Review, and Reexamination (7) Coordination and Cooperation with Parties Concerned 1) Coordination and Cooperation at the Stage of Audit Planning, Implementation, and Utilization of Audit Results 2) Coordination and Cooperation in the Accountability Audit 3) Coordination and Cooperation in Investigating the Major Irregularities Chapter 4: Features, Effects, and Experience of the Auditing System of Socialism with Chinese Characteristics Features of the Auditing System of Socialism with Chinese Characteristics (1) Features of the Auditing System 1) Audit Institutions Belong to Administrative Institutions 2) Local Audit Institutions Are Responsible to the Governments at Corresponding Levels and Audit Institutions at the Next Higher Level 3) Reporting to the Standing Committee of the National People’s Congress upon Entrustment by the Government (2) Features of Auditing Duties and Authorities 1) Supervision Scope of Government Auditing Reflects Chinese Characteristics 2) Economic Accountability Audit of Leading Officials 3) Follow-up Audit of Implementation of Policies and Measures 4) Authority in Regard to Audit Disposal and Punishment and Taking Coercive Measures (3) Features of the Auditor Management System 1) High Professional Requirements 2) Strict Disciplinary Requirements 3) Comprehensive Examination and Evaluation 164 164 164 165 165 166 167 167 167 168 168 168 169 171 172 172 172 173 176 179 179 181 185 188 189 189 190 191 Postscript Since the fi rst mention of an auditing system in the Constitution of the People’s Republic of China in 1982, the auditing system of socialism with Chinese characteristics has seen more than 30 years’ development with great achievements In order to summarize successful experience and development patterns so as to further enhance the system, a research group was formed to analyze development as well as the primary experience in building the auditing system of socialism with Chinese characteristics The work, a careful study of the foundations, framework, and features of the system, offered prospects for the further development of the system based on the new situation and requirements of Chinese national governance as well as social and economic development After the formation of the overall thinking, basic framework, and writing outline in 2012, Dong Dasheng, Yu Xiaoming, Shi Aizhong, Sun Baohou, Cheng Qiang, Chen Chenzhao, Zhang Tong, Yuan Ye, and Li Xiaozhong offered a number of modifications, participated in the ongoing discussions and put forward valuable opinions and suggestions many times when the fi rst draft appeared Zhang Ke, Guo Caiyun, Cui Zhenlong, Ma Xiaofang, Jiang Jianghua, Liu Liyun, Peng Xinlin, Wang Gang, Liang Jing, Liu Zhihong, Xiao Zhendong, Zhang Yaoding, Luo Tao, Zou Xiaoping, and Zhang Long took part in the outline discussion, material collection, and writing of the book; Yang Yajun, Zhang Qiang, and Zhang Long offered assistance in the final compiling process We wish to express hereby our sincere gratitude to all the contributors of the book In the process of writing, the book has gone through repeatedly discussion and modification To all our readers, we would like to present this book as an open thread Your valuable comments are greatly appreciated September 2016 Study on the Auditing System of Socialism with Chinese Characteristics Editor Liu Jiayi Copyright © 2017 by John Wiley & Sons, Inc 319 Index A Administrative Reports System, 18, 19 Agrarian Revolutionary War period, auditing during, 29–31 Agricultural Bank of China, audit of, 39, 52 Agricultural Development Bank of China, audit of, 53 Application of the China National Audit Office for Instruction on Several Issues concerning Audit Work, 39–40 Approval of the State Commission Office for Public Sector Reform for Transferring the Staffing of the CNAO’s Resident Audit Offices to Administrative Staffing, 57 The Art of War, 20 Audit assignments, execution of, 152– 155 system of audit documentation, 154 system of audit evidence, 154 system of audit field management, 154–155 system of audit notification, 152–153 system of audit program, 153 Audit disputes, settlement of, 166–168 system of applying for administrative reconsideration or instituting any administrative litigation, 167 system of applying for government ruling, 167 system of complaint, review, and reexamination, 167–168 Audit duty and authority, scope of, 263–276 auditing system of off-term officials regarding natural resources and assets, establishing, 275–276 auditing system of State capitals of State-owned enterprises, establishing and improving, 273–275 budget implementation and final accounts drafting, improving the auditing system of, 271–272 draft of the central budget implementation and final accounts, audit of, 272–273 national major policies and measures and macrocontrol deployments, establishing and improving real-time auditing system on implementation of, 268–271 relevant audits on resources and environment protection, 267–268 working mechanism, improving, 263–267 Audit institutions, duties and powers of, 128–145 audit jurisdiction system, 139–141 duties of, 131–139 Study on the Auditing System of Socialism with Chinese Characteristics Editor Liu Jiayi Copyright © 2017 by John Wiley & Sons, Inc 321 322 ◾ Index Audit institutions (continued) Opinions of the State Council on Strengthening Audit Work, 128–130 powers of, 141–145 right to adopt administrative compulsory measures, 143 right to dispose and punish, 144 right to examine, 142 right to investigate and obtain evidence, 143 right to notify or publish auditing results, 144–145 right to request submission of materials, 142 right to seek assistance, 143–144 right to transfer and recommend, 144 Audit institutions, supervision of, 281–283 accountability audit system for main leading officials of local audit institutions, improving, 282 exploring and establishing external auditing system, 283 powers and responsibilities, creating a list of, 282–283 supervision of higher-level audit institutions over lower-level audit institutions, strengthening, 282 society and public opinion, strengthening supervision of, 283 system of special auditors, improving, 283 Audit jurisdiction system, 139–141 accountability, 140–141 authorized audit, direct auditing system, and settlement mechanism of disputes, 141 general principles of, 140 Audit Law of the People’s Republic of China, 10, 47–48, 117 Audit law and regulations, 113–123 audit law and other relevant laws, 116–119 regulations for implementation of, 118–119 audit rules, 120–123 Constitution of the People’s Republic of China, 114–116 clauses of, on supervision through auditing, 115–116 local audit regulations, 119–120 basic strategy of rule of law, proposal and development of, 122–123 Audit law system, 283–284 Audit operation mechanism, 151–169, 276–279 audit assignments, execution of, 152–155 system of audit documentation, 154 system of audit evidence, 154 system of audit field management, 154–155 system of audit notification, 152–153 system of audit program, 153 audit disputes, settlement of, 166–168 system of applying for administrative reconsideration or instituting any administrative litigation, 167 system of applying for government ruling, 167 system of complaint, review, and reexamination, 167–168 audit plan and program systems, improving, 276 audit quality control, 160–164 hierarchical, 161 mechanism of “control review– assurance review–approval” for audit report, 161–162 Index ◾ system of audit quality check, 162 system of excellent audit project selection, 163–164 system of registration and reporting of intervention in audit work, 162 audit reporting system, system of government information disclosure and rectification and examination mechanism, improving, 278 audit results reporting and publication, 155–160 system of announcement of audit results, 159 system of audit disposal and punishment and audit transfer, 156–157 system of audit newsletter, specific report, and comprehensive report, 157–158 system of audit report, 155–156 system of disclosure of government information, 159–160 system of “two reports,” 158–159 audit work pattern of big data, creating, 277–278 audit work plan, 151–152 system of strategic plan on audit work, 151–152 coordination and cooperation with parties concerned, 168–169 in accountability audit, 168–169 in investigating major irregularities, 169 at stage of audit planning, implementation, and utilization of audit results, 168 organizational way of joint auditing from multidimensional and multiple angles, improving, 277 performance report system of audit institutions, improving, 278–279 323 rectification of problems disclosed by audit, 164–166 Opinions of the State Council on Strengthening Audit Work, contents on rectification in, 166 system of follow-up of rectification by audit institutions, 165 system of government supervision over rectification, 164 system of rectification by auditees, 164 system of supervising and assisting rectification by relevant authorities, 165 system of purchasing social audit services, improving, 279 Audit organization system, 123–128 audit institution framework, 126–128 audit institutions, establishment of, 124–125 upper- and lower-level audit institutions, relationship between, 125–126 Audit professionalization, 279–281 classified management system for auditors, establishing, 280 occupational guarantee mechanism of auditing, improving, 281 post order of professional and technical civil servants of auditing, establishing, 280 responsibility investigation mechanism for auditing posts, improving, 281 selection and appointment mechanism for auditors, improving, 280–281 Audit Professional Team Construction Plan (2008–2012), 243 Audit quality control, 160–164 hierarchical, 161 mechanism of “control review– assurance review–approval” for audit report, 161–162 324 ◾ Index Audit quality control (continued) system of audit quality check, 162 system of excellent audit project selection, 163–164 system of registration and reporting of intervention in audit work, 162 Audit operating mechanism, features of, 192–204 audit on land transfer revenues and expenditures and cultivated land protection (2014), 193–194 audit of post-disaster, 196–197 follow-up audit on major matters, 194–195 integrating audit resources, 192–193 Provisions of National Auditing Standards of the PRC on Major Illegal Behaviors, 199–200 publishing auditing findings to public, 201 results regarding audit by CNAO on 2,448 mining rights cases, 202–204 revealing and investigating major violations of laws and rules, stress on, 197–199 role of trial mechanism in the audit quality control, 200–201 Audit Regulations of the Executive Committee of Central Government of Chinese Soviet Republic, 30 Audit Regulations of the PRC, 44, 45, 49 Audit Report on the Central Budget Implementation in 1995, 51 Audit Report on Grain Inventory, 53 Audit reports, verifying, 139 Audit results reporting and publication, 155–160 system of announcement of audit results, 159 system of audit disposal and punishment and audit transfer, 156–157 system of audit newsletter, specific report, and comprehensive report, 157–158 system of audit report, 155–156 system of disclosure of government information, 159–160 system of “two reports,” 158–159 Audit rules, 120–123 Audit work plan, 151–152 system of strategic plan on audit work, 151–152 system of audit plan, 152 system of plan of audit assignments, 151–152 Auditing arrangement, 258–263 Auditing duties and authorities, features of, 179–189 authority in regard to audit disposal and punishment and taking coercive measures, 188–189 economic accountability audit of leading officials, 181–184 follow-up audit of implementation of policies and measures, 185–186 Opinions of China National Audit Office on Further Playing the Role of Audit on Promoting the Implementation of Policies for Stabilizing Growth, 186–187 supervision scope of government auditing, 179–181 Auditing Measures for Chinese-Foreign Equity and Contractual Joint Ventures, 45 Auditing system, about, 3–9 Auditing system, features of, 172–179 audit institutions belong to administrative institutions, 172–173 Index ◾ local audit institutions, 173–176 reporting to Standing Committee of National People’s Congress, 176–179 Auditing system of socialism with Chinese characteristics basic framework of, 113–169 audit institutions, duties and powers of, 128–145 audit law and regulations, 113–123 audit operation mechanism, 151–169 audit organization system, 123–128 auditor management system, 145–150 birth and development of, 15–72 auditing system during new democratic revolution led by Communist Party of China, 28–35 enlightenment, 69–72 establishment and development of, 35–69 history of, 15–28 experience of building, 233–245 auditing theory system of socialism with Chinese characteristics, 238–240 features of, 171–204 audit on land transfer revenues and expenditures and cultivated land protection (2014), 193–194 audit operating mechanism, 192–204 auditing duties and authorities, 179–189 auditing system, 172–179 auditor management system, 189–192 foundation of, 73–112 cultural, 100–112 institutional, 84–99 theoretical, 73–84 325 future development of, 247–284 general goal and requirement for further improvement, 247–254 key to development and further improvement, 257–284 principles indispensable for development and further improvement, 255–256 practical effects of, 205–233 ensuring smooth policy implementation, 210–216 improving economic benefits, 205–210 promoting administration according to law, 218–219 promoting anti-corruption, 219–223 promoting deepening of reform, 228–231 promoting openness and transparency, 232–233 safeguarding interests of the people, 223–228 safeguarding national security, 216–218 studying, significance of, 12–13 Auditing systems of 12 major countries, brief introduction to, 297–311 Australia, 306 Brazil, 308–307 France, 302 Germany, 301 India, 307 Japan, 303 Mexico, 310–311 Republic of Korea, 304 Russia, 299–300 South Africa, 309–310 United Kingdom, 305 United States, 298–299 326 ◾ Index Auditing theory system of socialism with Chinese characteristics, 238–240 Auditor management system, 145–150, 189–192 features of, 189–192 comprehensive examination and evaluation, 191–192 high professional requirements, 189–190 strict disciplinary requirements, 190 performance evaluation system, 150 professional education system, 149–150 professional qualification system, 149 professional requirements, 146–147 system for employment, appointment, and dismissal, 148–149 Auditors’ Education and Training Plan (2008–2012), 243 Auditors, modern core values for, 111 Australia, auditing system of, 306 B Bank of China, audit of, 52 Bao Zheng (999–1062), 102 Basic Principles of Government Audit, 50 Beijing Declaration, 252 Beijing Organizing Committee for the Olympic Games (BOCOG), 195 Beijing Shuanqiao State Farm, 39 Bibu (Court of Auditors) auditing system during Tang and Song Dynasties, 21–24 Book of Lord Shang: Interdicts and Encouragements, 19 Brazil, auditing system of, 308–307 Budget Law of the PRC, 271 C Canon of Laws, 18 Censor Prefecture, 20 Censorate auditing system during Qin and Han Dynasties, 19–20 Central Military Commission for the Chinese People’s Liberation Army, audit rules of, 121, 127 Chatfield, Michael, 17 China Construction Bank, audit of, 52 China International Trust and Investment Corporation, 52 China’s auditing system, information on development of, 285–295 before reform and opening up, 294 early days of the Republic of China and Nanjing KMT government period, 292 Han Dynasty, 287 Ming Dynasty, 290 New Democratic Revolution Period, 293 Qing Dynasty, 291 since reform and opening up, 295 Song Dynasty, 289 Tang Dynasty, 288 Zhou Dynasty, 286 Chinese auditing system, history of, 15–28 Bibu (Court of Auditors) auditing system during Tang and Song Dynasties, 21–24 censorate auditing system during Qin and Han Dynasties, 19–20 during Shang and Zhou Dynasties, 16–19 early days of Republic of China and Nanjing KMT government period, 26–28 Kedao Audit Supervising System during Ming and Qing Dynasties, 24–26 official auditing system during Shang and Zhou Dynasties, 16–19 Index ◾ Chinese National Audit Office (CNAO), 5, 38–39, 41–42, 44, 45, 46, 48, 49–50, 51–53, 55, 57, 64–65, 90–91, 114, 120, 127, 133–134, 243–245, 262, 267–268, 271, 272 Chinese National People’s Congress, 11 CNAO Program for the Development of Audit Work 2008–2012, 63 Collections of Liu Zongyuan, 21 Communist Party of China (CPC), 1, 10 13th National Congress, 87 18th National Congress, 74, 88, 95, 96, 106, 235 auditing exploration during establishment of, 28–29 Confucius, 103 Constitution of the Communist Party of China, 27, 29 Constitution of the People’s Republic of China, 10, 71, 72, 114–116 clauses of, on supervision through auditing, 115–116 Court of Auditors, 16 Cultural foundation of socialism with Chinese characteristics, 100–112 core values of auditors as dynamic force for improvement of, 110–112 socialist core value as ideological force propelling development of, 106–109 traditional Chinese culture as source of, 100–103 self-restraint, internal examination, and self-discipline, 103 value orientation of, 104–106 D Decision of the Central Committee of the Communist Party of China on Enhancing the Party’s Governing Capacity, 54 327 Decision of the Central Committee of the Communist Party of China on Some Issues concerning the Establishment of the Socialist Market Economic System, 47 Decision of the Central Committee of the Communist Party of China on Some Issues concerning Improvement of the Socialist Market Economic System, 53 Decision of the CPC Central Committee on Economic System Reform, 36 Decision of the CPC Central Committee on Several Important Issues of Comprehensively Deepening Reform, 61, 135 Decision of the CPC Central Committee on Some Major Issues Concerning Comprehensively Promoting the Rule of Law, 61, 96 contents of, 257 Declaration on the Independence of Supreme Audit Institutions, 254 Decrees for Checking Officials in the Capital and Counties, 18 Di Renjie (630–700), 102 Ding Yuxin (Ding Shumiao), 223 Draft Amendments to the Constitution, 37 E Eastern Zhou Dynasty (770–256 BC), 19 Economic Accountability Audit Joint Meeting or Leading Group, 57 Economic benefits, improving, 205–210 audit situation of financial stock funds (2014), 209–210 fiscal revenue growth promoted by audit institutions, 206–207 National Audit Office of China, main performance of (2010–2014), 208 328 ◾ Index Economic benefits (continued) supreme audit institutions’ input-out ratios of China, United States, and United Kingdom (2010–2013), 207 Establishment Law of the Court of Auditors, 27 Extended Continuation to Zizhi Tongjian, 23 F Fixed assets investment, audit of, 212–213 Foreign funds application, auditing of, 133–136 “Four Comprehensives,” specific connotations of, 249–251 France, auditing system of, 302 Functional power restriction mode, G Germany, auditing system of, 301 “Golden Auditing Project,” 57, 65, 244 Great Plan, 16 Guan Zhong, 18 Gui Bingquan, 221 Guo Zhenqian, 48, 51 H Hai Rui (1514–1587), 102 Han Dynasty (206 BC–220 AD), 19, 287 Han Fei-tzu (280–233 BC), 19 Han Huang (723–787), 22 He Hongda, 222–223 Historical opinions, A History of Accounting Thought (Chatfield), 17 History of the Former Han, 19 The History of Ming, 24–25 Hu Qiaomu, 36 Hu Yuzhang, 221 Huaihai Cement Plant, 38–39 Huang Wenshao, 28 Hubei Jianli Foods Company, 39 I Imperial Household Department, 26, 70 Independence of audit organs, 254 India, auditing system of, 307 Inscriptions of All Departments by Supervisory Censor Wu Bogu, 23 Institutional foundation of socialism with Chinese characteristics, 84–99 state economic system, 94–99 basic economic system with public ownership, 95–96 government functions under socialist market economy system, 96–99 state political system, 86–94 system of people’s congresses, 92–93 unitary state structure, 93–94 terminology, 85–86 Institutional History of Tang, 21 Interim Measures for Audit Supervision of Central Budget Implementation, 50 Interim Organizational Regulations of the Government of the ShaanxiGansu-Ningxia Border Region, 31 Internal audit work of units subject to supervision through auditing by audit institutions, guidance and supervision over, 138–139 International Organization of Supreme Audit Institutions (INTOSAI), 254 J Japan, auditing system of, 303 Ji Zi, 16 Index ◾ 329 K N Kedao Audit Supervising System during Ming and Qing Dynasties, 24–26 King Wu, 16 National Audit Office’s Provisions on Strengthening Audit Discipline Inspection, 50 National Audit Work Outline 1991–1995, 43 1999–2003, 242 National Audit Work Plan (2003–2007), 54 National Auditing Standards of the PRC, 68, 120 National governance system and capacity, 253 National security, safeguarding, 216–218 national government debts, conducting overall audit on, 217–218 National War of Resistance against Japanese Aggression, auditing during period of, 31–32 establishment of auditing system in all border regions, 33–34 New Book of Tang: Records of Officials, 21 New Creation of the Censorate: Records of the Imperial Secretariat Ministry, 22 New democratic revolution led by Communist Party of China, auditing system during, 28–35 Agrarian Revolutionary War period, 29–31 exploration during establishment of Communist Party of China and Great Revolution period, 28–29 Liberation War of China, 32–35 period of National War of Resistance against Japanese Aggression, 31–32 New Democratic Revolution Period, 293 Nine Articles of Supervisory Censor, 20 L Law of Administrative Reports System, 72 Law of the Court of Auditors on Organization, 27 Law of Penalties on Audit Officials, 27 Law of the State of Qin, 18 Law of Verifying the Properties of Government Departments, 18 Legislative Articles of Bibu, 72 Li Jinhua, 48 Li Peiying, 222 Liberation War of China, auditing during, 32–35 Lin Boqu, 30 Lin Kongxing, 221 Liu Jiayi, 62 Liu Shaoqi, 29 Liu Shi (949–997), 23 Liu Yan (715/716–780), 22 Liu Zhijun, 223 Lu Peijian, 38, 43 Lu Wanli, 221 M Mao Zedong, 30, 233, 256 Marx, Karl, Marxism, 104 Measures for the Quality Control of Audit Projects of Audit Offices (Trial), 59 Mexico, auditing system of, 310–311 Ming Dynasty, 24–25, 26, 290 Hongwu Era of, 24 Ming and Qing Dynasties, Kedao Audit Supervising System during, 24–26 Monograph on Criminal Law, 18 330 ◾ Index Ninth Five-Year Plan of the People’s Republic of China for National Economic and Social Development and Outlines of Objectives in Perspective of the Year 2010, 47 North China Financial and Economic Committee, 32 North China People’s Government, 32 North, Douglass C., 1, Northern Song Dynasty (960–1127), Notice on Audit Supervision of Financial Insurance Institutions, 40 Notice for Enforcing Audit Institution Decision on Handling Payments, Deductions, Suspension of Financial Appropriation, and Bank Loans, 40 Notice of the General Affairs Office of the State Council on Issues concerning Audit Work by Computer Information System, 135 contents of, 136–138 Notice on Headcount Increase and Redeployment at All Levels of Audit Institutions, 42 Notice on Issues Concerning Audit through Computer Information System, 119 Notice on Issues concerning Establishment and Staffing at All Levels of Local Audit Institutions, 38 Notice on Recruiting Cadres for the National Court of Auditors, 38 Notice on Several Issues concerning the Accountability Audit of Factory Directors Leaving Their Posts, 43 Notice on Several Issues concerning the Enforcement of Provisional Regulations of the State Council on Government Audit Work, 40 Notice of the National Audit Office Issuing the “Eight Not Allowed” Audit Work Discipline, main contents of, 191 O On Practice (Mao), 256 Opinions on Appointing Democratic Party Members and Non-party Personages as Special Auditors, 91 Opinions of China National Audit Office on Further Playing the Role of Audit on Promoting the Implementation of Policies for Stabilizing Growth, 186–187 Opinions on Cultivating and Practicing the Core Values of Socialism, 107 Opinions on Deepening the Reform of Administrative System, 60 Opinions on Establishing National Audit Institutions (Exposure Draft), 37 Opinions on Further Strengthening Research on Audit Theory, 244–245 Opinions of National Audit Office of China on Strengthening Audit Supervision, 46–47 Opinions of the State Council on Strengthening Audit Work, 61, 96, 124, 128–130, 135, 263, 268, 279 article 18 of, 175–176 contents on rectification in, 166 Organizational Regulations on All Departments of the North China People’s Government, 32 P Pei Xiu, 22 Peng Zhen, 37 Power restriction modes, Index ◾ Prefecture of the Counsellor-in-chief, 20 Problems disclosed by audit, rectification of, 164–166 Opinions of the State Council on Strengthening Audit Work, contents on rectification in, 166 system of follow-up of rectification by audit institutions, 165 system of government supervision over rectification, 164 system of rectification by auditees, 164 system of supervising and assisting rectification by relevant authorities, 165 Procedures for Trials in Audit Work, 40 Provisional Constitution of the Republic of China, 27 Provisional Measures for Auditing of Fixed Assets Investment Prior to the Commencement of Construction, 44 Provisional Regulations concerning Below-County-Level Party and Government Leading Cadres’ Economic Accountability Audit, 49 Provisional Regulations on the Contractual Management Responsibility System of Industrial Enterprises Owned by the Whole People, 43 Provisional Regulations on Government Audit Work, 40 Provisional Regulations concerning Leading Personnel of State-owned Enterprises and State Holding Enterprises in Regard to the Economic Accountability Audit during Their Term of Office, 49 Provisional Regulations of the State Council on Government Audit Work, 40 331 Provisions of National Audit Office of China on Announcement of Audit Findings, 59 Provisions of the National Audit Office on the Implementation of Audit Work Procedures, 46 Provisions of National Auditing Standards of the PRC on Major Illegal Behaviors, 199–200 Provisions on the Transfer of Suspected Criminal Cases by Administrative Organs for Law Enforcement, 119 Q Qin and Han Dynasties, censorate auditing system during, 19–20, 69 Qing Dynasty (1644–1912), 25–26, 70, 291 R Rawls, John, 1–2 Rees, E A., 71 Reform and opening-up period, establishment of auditing system in early days of, 36–40 establishment of audit institutions, 37–38 government audit system established stipulated by Constitution, 36–37 positive exploration and carrying out, 38–39 standardization of audit work, 39–40 Regular Auditing System of Administrative Units, 44 Regulations concerning Accountability Audit for Leading Officials of the Party and Government and Leaders of State-Owned Enterprises, 68 332 ◾ Index Regulations for Audit Supervision on the Operational Conversion Mechanism of Industrial Enterprises Owned by the Whole People, 45 Regulations for the Implementation of the Audit Law of the People’s Republic of China, 50 Regulations on Punishment for Illegal Fiscal Acts, 119 Relationship between auditing system and system functions, analysis of, 7–9 Report on Preparation and Building of Audit Institutions Submitted to the State Council, 38 Report of the State Council on the Audit on the Central Budget Implementation and Other Fiscal Revenues and Expenditures in 2014, 214 Report of Suggestions on Deepening the Reform of Grain Distribution System, 53 Republic of China and Nanjing KMT government period, auditing system in early days of, 26–28 Republic of Korea, auditing system of, 304 Rites of Zhou, 17, 72 Ruan Xiaoxian, 29, 30 Rules for Implementation of Audit Regulations of the People’s Republic of China, 46 Rules for Implementation of the Regulations concerning Accountability Audit for Leading Officials of the Party and Government and Leaders of StateOwned Enterprises, 68 Rules of Procedures for Auditors, 31 Russia, auditing system of, 299–300 S Schultz, Theodore William, Seventh Five-Year Plan of the People’s Republic of China for National Economic and Social Development, 41 Shang and Zhou Dynasties, official auditing system during, 16–19 Shu Yuanyu (791–835), 22 Six Ministries, 25–26 Social Security, audit situation of, 227–228 Socialist core values, 108–109 Socialist market economic system auditing system at establishment of, 47–53 adjusting the institutional setting and reinforcing audit independence, 48 continuously enhancing audit supervision, 51–53 preliminary establishment of audit law system, 48–51 auditing system during improvement of, 53–60 building the system of announcement of audit findings, 59–60 building the “3 + 1” audit pattern, 55–56 defining guidelines for audit work, 54–55 improving talents capacity, legal framework, and technologies, 57–59 Song Dynasty (960–1279), 22–24, 289 South Africa, auditing system of, 309–310 Southern Song Dynasty, 16, 23, 24 Jianyan Era of, 23 Spring and Autumn Period (770–476 BC), 18 Index ◾ Stabilizing growth, real-time audit on implementation of policies for, 214–216 State financial revenues and expenditures, special audit investigation in specific matters of, 138 Statutory subject matters, supervision through auditing over, 131–133 Structural power restriction mode, Suggestions on Setting up National Audit Institutions to the Standing Committee of the National People’s Congress, 37 Sun Jinchuan, 29 Supreme audit institutions, Supreme audit institutions mode, main features of, 177–178 Systems, about, 1–3 T “3 + 1” audit pattern, 55–56 Taizai, 17 Tang Dynasty, 21–22, 69, 288 Teng Daiyuan, 30 Theoretical system of socialism with Chinese characteristics, 73–84 establishment and development of, 79–80 exploration and innovation of, 80–84 ideological foundation for establishment and development of, 78–79 practical and theoretical foundation for contents and arrangement of auditing system of socialism with Chinese characteristics, 80 terminology, 75–78 advancing the great cause of, 77 basic tasks of, 75 core of leadership of, 78 cultural development of, 76 333 essence of, 75 development drive of, 76 development stage and strategy of, 76 diplomacy and international strategy of, 77 ecological development of, 77 economic development of, 76 fundamental purpose of, 76 ideological line of, 75 national defense and army building of, 77 political development of, 76 social development of, 77 supporting forces of, 77 Tianjin Iron Plant, 38 Transition from the planned economy to socialist market economy, auditing system in the period of, 40–47 continuous improvement of the audit institution system, 41–42 establishing professional auditing system of various industries, 42–45 promoting framework building of audit laws and regulations, 45–47 Trial Measures for Comprehensive Assessment and Evaluation of the Local Party and Government Leading Team and Leading Cadres in Conformity with the Scientific Outlook on Development, 56 Trial Measures of National Audit Office of China Announcement on Audit Findings, 59 U United Kingdom, auditing system of, 305 United States, auditing system of, 298–299 334 ◾ Index W Walker, David (U.S Auditor General), 59 Wang Bingqian, 36 Wang Jianzhong, 222 Wang Yi, 222 Warring States Period (476–221 BC), 18 Well-Off Society in the New Period, auditing system during overall building of, 60–69 exploring and innovating audit methods and ways, 63–66 improving Audit Law system, 66–69 improving government audit pattern, 62 Western Zhou Dynasty, 17, 70 Wenxian Tongkao of the Qing Dynasty, 26 Williamson, Oliver, Work Plan for Real-time Audit on the Implementation of the Measures for Stabilizing Growth, Promoting Reform, Adjusting the Structure and Benefiting People’s Livelihood, 214 Work Regulations on Factory Directors of Industrial Enterprises Owned by the Whole People, 43 Work Report of Audit Institutions since Establishment, 43 X Xi Jinping, 10–11, 13, 84, 255 Xianchun Lin’an Zhi, 23 Xie Juezai, 31 Xu Lianzhong, 221 Y Yao Yilin, 36 Yin Ruins’ Oracle-Bone Inscriptions, 16 Yu Mingtao, 38 Z Zaifu, 17, 72 Zhang Kundi, 29 Zhao Fu, 221 Zhongyong (Doctrine of the Mean), 103 Zhou Dynasty (1046–256 BC), 69, 286 Zhu Rongji, 50, 57, 59 ... Chinese Characteristics (4) The Theoretical System of Socialism with Chinese Characteristics Leads the Continuous Exploration and Innovation of the Auditing System of Socialism with Chinese Characteristics, ... chapters: The Birth and Development of the Auditing System of Socialism with Chinese Characteristics; Foundation of the Auditing System of Socialism with Chinese Characteristics; Basic Framework of the. .. The Theoretical System of Socialism with Chinese Characteristics Provides the Practical and Theoretical Foundation for the Contents and Arrangements of the Auditing System of Socialism with Chinese