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The “immune system”: a new concept to describe the essence of state auditing

Author  :       Source  :    Chinese Social Sciences Today     2013-12-26

 

State auditing is an independent activity for monitoring the economy, which is subject to the strategies of national development and reflects the will of the people, as well as representing the people in national governance. State auditing is distinguished from other kinds of auditing due to its political nature: it is one of the fundamental political institutions as well as constituting a significant part of national governance.

State auditing is in essence an independent monitoring of the economy

The theory of modern auditing holds that auditing depends on the existence of economic accountability. According to this premise, state auditing came about following the establishment of public accountability. State auditing is actually a strong monitoring mechanism for guaranteeing public accountability. In the late eighties, the argument that auditing is essentially a supervision of economic activities became a mainstream view in Chinese academic and policy circles. A large number of the auditing experts of the time claimed that state auditing represents a form of national supervision and evaluation of the users of state assets, and it must maintain its essential characteristics of independence, legality and enforcement. State auditing needs to be independent of the audited units, as well as have the right to audit and monitor the authenticity, legality and effectiveness of the financial revenues and expenditures of state-owned units, institutions and enterprises. In this way it can enhance the efficiency of the use of financial assets, safeguard the financial and economic order of the country and guarantee the healthy development of the national economy.

Due to economic and social development, society judges the way in which the state makes use of public assets by ever higher standards, and the range of functions of state auditing has expanded. The objectives of auditing used to be simply ensuring basic legality and authenticity, but they have now enlarged to include economic and efficiency goals. Regarding this change, American Professor David Flint proposed the theory of the mechanisms of social control, which holds that the essence of auditing is a mechanism of social control for ensuring accountability. Therefore, many of the debates related to the essence of state auditing focus on the controls enacted during and after the events, and they have reached a broad consensus that the essence of auditing is independent economic supervision.

Conducting state auditing is essential for the people

The essence of state auditing is achieving a people-oriented kind of governance. Its origin and development rely on the objective requirements of national governance. Following historical circumstances, state auditing has evolved according to its inherent laws, with its aims, missions, focuses and ways changing along with national governance. The field of state auditing has been continuously transformed and enriched by the changes in the form and reach of national governance. The object of its work has extended from authenticity and legality to the economy, efficiency and the effectiveness of government activities, and even to the security, sustainability and fairness of national governance.

Currently, auditing bodies take the aim of “promoting the rule of law, maintaining the livelihood of the people, pushing forward reform and stimulating development” as their starting point and foothold. They take part in national governance in an orderly fashion through economic supervision, so as to preserve the fundamental interests of the people. However, because China is going through a special stage of its economic development, some irregularities may still occur in government activities related to economic construction, education, medical treatment, housing, energy resources and environmental protection. As a department which generally supervises the economic activities of the government, auditing bodies are in a good position to regulate the financial revenues and expenditure of the government at all levels, prevent government corruption and enhance government credibility. In the meanwhile, the public also places great expectations on auditing bodies in terms of fighting corruption and preserving social justice. Therefore, auditing bodies should understand and incorporate the main characteristics of national governance during this period of transition, as well as effectively supervise and restrict abuses of authority under the rule of law.

State auditing must put more emphasis on prior control and active prevention

Both state auditing and the objects of its supervision are components of national political institution, which jointly assume the reasonability of guaranteeing and realizing the rights of the people. The concerns of state auditing cover the healthy operation of the economy and society, national development and the security of political power, rather than being limited to the management and operation of assets. Liu Jiayi, Auditor General of the National Auditing Office of the People’s Republic of China, first brought up the theory of the immune system in July 2011. This theory holds that state auditing represents an immune system for safeguarding the operations of the economy and society. The immune system theory is a recent achievement, based on incorporating multidisciplinary knowledge and drawing lessons from practical experience.

The proposed theory of the immune system has an important significance. It enlarges the scope of state auditing, enriches its content and expands the space in which it can play its role.

State auditing has become an immune system for guaranteeing the healthy operation of the economy and society because it pays attention to government responsibility and national interests, as well as safeguarding national security. In the meanwhile, it retains its independence and coerciveness, thus monitoring other bodies of economic supervision. In this sense, state auditing is in essence an immune system for independently supervising economic activity and engaging in national governance.

It must be emphasized that the fundamental function of state auditing is economic supervision. The immune system not only plays an important role in preventing illegal behavior, but also represents the public in supervising government actions, thus safeguarding the healthy operation of the country and its good governance.

 

 

The article is the periodical research result of Beijing Philosophy and Social Science Planning Program. 

The author is from the School of Business of the Renmin University of China.

 

 

The Chinese version appeared in Chinese Social Sciences Today, No. 529, November 27, 2013.

Chinese link: http://www.csstoday.net/xuekepindao/guanlixue/86212.html

 

 

  Translated by Chen Meina

  Revised by Gabriele Corsetti

Editor: Du Mei

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