Title

Institutional arrangements and government audit independence in China

Document Type

Journal article

Source Publication

Abacus

Publication Date

9-1-2016

Volume

52

Issue

3

First Page

532

Last Page

567

Publisher

Blackwell Publishing

Keywords

Audit independence, Audit storms, Auditing, China, Government audit, People's Congress

Abstract

China has adopted an executive-dominated government audit system (GAS), which is frequently criticized for lacking independence. Through a questionnaire survey and interviews, we investigate whether and how the reporting/control requirements of the GAS (hereafter, the institutional arrangements) result in a lack of government audit independence in China and how this affects budget supervision by the People's Congress. We contribute field evidence to support the prediction that an executive-dominated GAS lacks independence and transparency, which in turn is detrimental to the wider accountability regime. However, the specific level of independence varies according to the types and levels of government audit. Our findings enrich the government audit literature, enhance our understanding of the relationship between institutional arrangements and audit independence in a transition economy, and serve as a call for institutional reform relating to the Chinese GAS.

DOI

10.1111/abac.12086

Print ISSN

00013072

E-ISSN

14676281

Funding Information

Financial support from the National Natural Science Foundation of PRC (grant no. 71002005, 71272189) and the National Social Science Foundation of PRC (key project grant no. 11AZD010). {71002005, 71272189, 11AZD010}

Publisher Statement

Copyright © 2016 Accounting Foundation, The University of Sydney. Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Language

English

Recommended Citation

Xiao, J. Z., Yang, S., Zhang, X., & Firth, M. (2016). Institutional arrangements and government audit independence in China. Abacus, 52(3), 532-567. doi: 10.1111/abac.12086

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