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