Factors Affecting The Quality Of Government Auditing Research

Government audit has been a hot topic for several years, and Government Audit Quality(GAQ) is the key to government audit. To research the factors which affect GAQ will favor improving GAQ, reducing agency cost and relieving public resource accountability.Based on the institutional background of government audit, the history of Chinese government audit and historical events indicate that the factors which affect GAQ exist as follows: from the viewpoint of demanders, the public's democratic consciousness increases gradually, the capacity that People's Congress supervises government has increased too, and government strengthens it own fiscal administration and administration ability, which all stimulate audit demand and further GAQ. From the viewpoint of suppliers, the independence and competence of auditors have increased, which improve GAQ. But it is a subjective inferrence based on the surface, its scientificalness still needed to be examined through theory analysis and empirical research.In theory, This dissertation firstly uses agency cost theory, public accountability theory and signaling theory to analyze the cause of government audit demand and the pathes that audit demanders, audit suppliers affect GAQ; Secondly, this dissertation uses institution change theory to analyze how audit demand and audit supply improved GAQ in reviewing the history of government audit. Thirdly, based on existing literature reviewing and theory analyzing, this dissertation believes that the theoretical principle of process audit quality and outcome audit quality lies in process viewpoint and outcome viewpoint of philosophy, law and ecomony; Lastly, based on the accountability theory and agency theory, this dissertation divides audit demand into the demand of the public, the demand of the People's Congress and the demand of government, and divides the factors whic affect audit supply capacity into the independence and competence of auditors according to DeAngelo(1981b).In empirical research, this dissertation uses audit projects which attend National Excellent Audit Iitem Match and datas from Resident Offices of National Audit Office, Dispatched Offices of National Audit Office, Provincial Audit Office, Prefecture Audit Office and County Audit Office. Through Principal Component Analysis, Linear Regression, Two-stage OLS, this dissertation examines the appropriateness of adopted GAQ indexes, the effects of audit demanders and audit supplier on GAQ. The research result indicates that process audit quality and outcome audit quality relates each other significantly. Consequently, ourcome audit quality can replace process audit quality and become the right measures of audit quality when process audit quality can't be acquired. Based on some outcome audit quality indexes, the empirical evidence proves that the increasing audit demand from the public, the People's Congress and government improves GAQ. In addition, the independence of auditors steming from different systems and the competence of auditors also affect GAQ significantly.The research result is of great significance to audit theory and audit practice. The theory significance is that the definition and measure of audit quality is the starting logic point of audit research. It has been proved that the measurers of GAQ which is used in this dissertation is right, so they can be adopted to represent GAQ in the future research. Meanwhile, this dissertation proves that auit demanders and audit supplier both affect GAQ. Consequently, to improve GAQ, we shoud attach importance to the audit demand of the public, the People's Congress and government, and take measures to provoke these audit demand. For example, carry out national audit disclosure and raise the transparencyof government audit. In addition, we should strengthen audit indenpence. As it is difficult to change current government audit systems, audit office should take some measures to strengthen audit indenpence, eg. Cross-audit. At last, to improve GAQ, Audit office should train auditors to raise their competence.