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As China’s Public Expenditure takes up more and more GDP (gross domestic product) in proportion, the Chinese people, owners of social resources, want to hold the Chinese government accountable. Meanwhile, relatively limited financial resources, the increasingly sophisticated legal system, as well as the need of clean government, have pushed the performance audit work greatly in China. In 2008, the central government, in response to the international financial crisis, developed a 2-years- four-trillion -yuan investment plan to boost domestic demand. In order to achieve the government’s economic and policy goal, performance audit is even more indispensable.Our laws and regulations on performance audit are immature, and our auditor is far from independent. Since our government lacks an established standard auditing procedure; therefore, audit work performed cannot fulfill the audit requirements. These are both the problem we face and the reason for the slow development of performance audit. As a result, most audits fail to hold our government accountable; thus, unable to increase the effectiveness of government expenditure.This essay will start with what a performance audit is, who it audits, why it audits the targeted entity, and how it differs from the traditional audit. After the thorough review of practices in other countries, by analyzing the uniqueness of China’s current social status, the author will identify flaws in the current system and offer some practical solution that is designed for China.This essay starts with the research background of performance audit and the meaning of the topic. Then the author introduces the related concepts; the meaning the objective and subjective, and the aim of performance audit, etc. This essay will point out the disadvantages (in the area of audit independence, resources supporting, audit methods, and organizing, etc.) of our audit practice though case studies about Hong Kong and US audit system. Last but not least, aim at the disadvantages mentioned, the author will give some possible suggestions and solutions.In this essay, the author will employ qualitative analysis, comparative analysis and case study research methods. The goal of the essay is to promote the governmental performance audit and give practical suggestions; what’s more, the view of promoting budget performance must be highlighted.
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