| China’s economy has developed rapidly since the reform and opening up.In 2008,the financial crisis broke out and global economy was in recession.Affected by the adverse external environment,China’s economy grows slowly.The growth rate of the economy declines year by year since 2008 and the GDP growth rate drops from 14.2%in 2007 to 6.6%in 2018.To fuel domestic demand and reverse the decline of the growth of economy,Chinese government has successively implemented various measures such as the 4 trillion stimulus plan,loose monetary policy,as well as lowering bank deposit interest and deposit reserve ratio,but all failed.The problem is that major economic contradictions have changed.The economic and social supply level can no longer meet people’s growing material and cultural needs currently,and the misallocation of supply and demand constrains the development of the economy.Chinese people shopping abroad frantically in recent years,for example,Chinese rush to buy toilet lids in Japan in 2015,which is thought-provoking.Therefore,it is difficult to solve the problems faced by China’s economy from the demand side only.On November 10th in 2015,President Xi proposed the ’supply-side structural reform’ for the first time at the 11th meeting of the CPC Central Leading Group for Financial and Economic Affairs,and emphasized ’strengthening the supply-side structural reform and improving the quality of the supply system while moderately expanding domestic demand’.The Outline of the Thirteenth Five-Year Plan for National Economic and Social Development of the People’s Republic of China’ also emphasizes promoting ’supply-side structural reforms’ to meet people’s growing,escalating and individualized need for material,culture and ecological environment.Besides,carrying on the ’supply-side structural reform’ and adhering to the strategy of ’five priority tasks’-’cutting overcapacity,de-stocking,de-leveraging,reducing costs and improving weak links’ were emphasized repeatedly in the 19th National Congress and the government work report subsequently.Therefore,’supply-side structural reform’ has become an important strategy promoting the development of China’s economy and society.As a component of the national political system,government audit is an institutional arrangement that supervises and restricts power,and is an important part of the state supervision system.’Audit Law of the People’s Republic of China’ stipulates that audit offices have the rights to audit and supervision independently in accordance with the law,indicating the independence,authority and mandatory of government audit.In July 2011,Jiayi Liu proposed that"government audit is essentially a process in which the government uses power to supervise and restrict power and is an ’immune system’ that has the function of preventing,revealing and resisting in the big system of state governance" at the 3rd Board of Directors of China Audit Society,emphasizing the role of government audit in state governance.Maintaining the security of the economy and promoting the development of the economy are paths to sound governance in China.As a supervisory and control tool in the system of state governance,government audit is an effective way to promote the development of economy.Audit offices around the world all play important roles in guaranteeing the quality of the development of the economy.U.S.Government Accountability Office(GAO)published ’GAO 2018-2023 strategic plan’ on February 22,2018,stating eight trends affecting government and society,such as domestic and global security,economics and trade as well as environment and sustainability,showing the importance of government audit in advancing the development of economy and society.’The 2017-2022 Strategic Plan’ published by the International Organization of Supreme Audit Institutions(INTOSAI)in April 2016 set ’promoting the development of economy’ as one of the strategic goals of sustainable development in the next 15 years,and further emphasized that the global audit institutions should incorporate government audit into the strategic framework of increasing the development of economy.As a special economic control mechanism that guarantees and promotes the full and effective implementation of accountability,government audit is an effective supervisory and control system promoting the development of economy and improving state governance.Therefore,government audit must be an important tool to promote ’supply-side structural reform’ and the quality of economy.Considering that economic development has entered ’new normal’,how government audit serves for the ’ supply-side structural reform’ has become a hot topic in current area of auditing research.Based on the theory of accountability and government audit,this study examines the role of government audit in the ’ supply-side structural reform’theoretically and empirically,as well as explores the path of government audit to promote ’supply-side structural reform’.The conclusions of this study have theoretical and practical implication for promoting the development of audit theory,improving the Chinese government audit theory system,and advancing’supply-side structural reform’.The remainder of this study is organized as follows.Chapter 1 is introduction.This chapter mainly introduces the background,contribution,framework and research methods.Chapter 1 is the overall planning of this study.Chapter 2 is literature review.This section reviews the literatures related with government audit and ’supply-side structural reform’,summarizes the limitations as well as points out our motivation and contribution.Chapter 3 is the theoretical framework of government audit promoting’supply-side structural reform’.Based on the theory of accountability,the economic control function of the government audit and the content of the’supply-side structural reform’,this section constructs a theoretical framework of government audit promoting ’ supply-side structural reform’ including the theory,functional orientation and path.This chapter is one of the core parts of this study,which lays a theoretical foundation for the following chapters.Chapter 4 is the empirical results of government audit and ’ supply-side structural reform’ at the local government level.According to the five major tasks of ’supply-side structural reform’-’cutting overcapacity,de-stocking,de-leveraging,reducing costs and improving weak links’,using provincial-level data,this chapter examines the role of government audit at the local government level empirically.Using ’changes of over-capacity,changes of house for sale,the scale of government debt per capita,the comprehensive cost of industrial enterprises,and the total number of patents obtained’ to measure ’cutting overcapacity,de-stocking,de-leveraging,reducing costs and improving weak links’ separately,and using ’the number of employees of the government audit offices,the number of people audited,the amount of money detected,and the number of the audit reports’ to proxy for ’the intensity of government audit,the implementation of government audit in personnel and money,and the disclosure of government audit separately,using the samples from 2008 to 2016,we examine the specific impact of government audit on ’supply-side structural reform’ at the local government level.Chapter 5 is the empirical results of government audit and ’supply-side structural reform’ at the central SOEs level.Using the state-owned enterprises controlled by central government(central SOEs)from 2008 to 2017 as samples,using ’capacity utilization rate,inventory changes of real estate enterprises,leverage,comprehensive cost of enterprises,the number of patents acquired jointly,audited by the audit office’ to measure ’cutting overcapacity,de-stocking,de-leveraging,reducing costs,improving weak links and government audit separately,this chapter examines the specific impact of government audit on’supply-side structural reform’ at the central SOEs level,and further examines the incremental effects and deterrent effects of government audit.Chapter 6 is the path of government audit improving the ’ supply-side structural reform’.This chapter explores the way of government audit to promote’supply-side structural reform’,such as advancing full coverage of government audit,improving the institutions of government audit,innovating the methods of government audit,and enriching the types of government audit.Chapter 7 shows our conclusion,contributions,limitations and prospects.This chapter summarizes the conclusion,contributions,and the possible limitations.Finally,we look forward to the development of future research.Through the framework construction,the empirical test at both the local government and central SOEs levels,and the proposal of the implementation methods,the following conclusions are drawn:(1)The ’supply-side structural reform’ is a strategy to improve the supply effectively and achieve high-quality economic development ultimately.The measures are to adjust the economic structure and optimize the allocation of resource;the focus is on ’cutting overcapacity,de-stocking,de-leveraging,reducing costs,improving weak links’;the purpose is to improve the quality of supply and thus the quality of development of economy.According to the main content,the ’supply-side structural reform’ can be expanded into five basic tasks-’cutting overcapacity,de-stocking,de-leveraging,reducing costs,improving weak links’;According to the subjects of the it works on,the ’supply-side structural reform’ can be extended to reform at the local government and central SOEs levels.(2)According to the theory of government audit,modern government audit originates from and develops with accountability,ensuring the full and effective implementation of accountability(Cai,2001).Government audit promoting’supply-side structural reform’ is an inevitable requirement with the development of accountability.The laws,regulations and practices of government audit help government audit promote the ’supply-side structural reform’.Government audit can promote ’supply-side structural reform’ through supervising,preventing,early warning,correcting and repairing.At the local government level,the way of government audit in promoting ’ supply-side structural reform’ includes improving basic system,monitoring economic power,and evaluating policy implementation effects.For central SOEs,the path of government audit to promote ’supply-side structural reform’ consists of the financial statement audit,the audit of leaders’economic responsibilities and the audit of the implementation of key policy.(3)Using provincial data from 2008 to 2016,this study examine the impact of government audit on ’supply-side structural reform’ at the local government level.The result shows that the government audit helps to cut overcapacity,de-leverage and improve weak links,but fail to de-stock and reduce costs.Specifically,①government audit is helpful for de-capacity at the provincial level;the stronger the function of government audit is,the more over-capacity cut;this effect is more pronounced in provinces with more SOEs.②government audit has reduced provincial debts significantly;further analyses indicate that this effect lagged;this effect is more pronounced in provinces with higher GDP promotion pressures.③government audit has significantly improved the number of patents in each province,indicating that government audit improved innovation;further analyses indicate that this effect lagged;government audit improves the number of invention patents,utility model patents and design patents significantly.④no evidence shows the effect of government audit on de-stocking and reducing costs.(4)Using central SOEs from 2008 to 2017 as sample,this study tests the impact of government audit on ’supply-side structural reform’ at the central SOEs level.The result shows that government audit is conducive to cutting overcapacity,de-leveraging and improving weak links,but government audit do not work in de-stocking and reducing costs.Specifically,①government audit improved the capacity utilization rate of central SOEs significantly,and there is a significant lag effect;further analyses indicate that the impact of government audit on the improvement of capacity utilization rate has an incremental effect,the more government audits,the higher of the capacity utilization rate of central SOEs is.There is a deterrent effect in the same province.The more central SOEs audited,the higher the capacity utilization rate of unaudited central SOEs in the same province is.②government audit reduced the leverage of central SOEs significantly,and there was a significant lag effect;further analyses indicate that there is an incremental effect on the restraint of central SOEs’ leverage.The more government audits,the lower the leverage of central SOEs is.There is a deterrent effect in the same province and industry.The more central SOEs audited,the lower the leverage of unaudited central SOEs in the same province and industry is.③government audit increased the number of patents jointly acquired by central SOEs significantly,and this effect lagged;further analyses indicate that there is an incremental effect on the promotion of patent,and the more the government audits,the more patents jointly acquired by central SOEs are.There is a deterrent effect in the same province.The more central SOEs audited,the more the patent of unaudited central SOEs in the same province invent.④no evidence shows that government audit promoting the de-stocking of real estate central SOEs and the comprehensive cost in SOEs.(5)This study postures that expanding the scope of government audit,constructing professional audit team and thus achieving full coverage help government audit promote ’supply-side structural reform’.Improve the government audit institutions,such as the basic institutions and the announcement institutions;Implement continuous audit and integrated audit in practice,and audit in advance to improve the efficiency and effectiveness of government audit.Audit the relevant institutions,conduct follow-up audits and economic responsibility audits of relevant leaders,so as to ensure the implementation of ’supply-side structural reform’.The contribution of this study include following aspects:(1)Constructing a theoretical analysis framework of government audit promoting ’ supply-side structural reform’.On the basis of defining and expanding the connotation of ’supply-side structural reform’,this study constructs a framework including theory,function and path of government audit promoting ’supply-side structural reform’.The theory consists of the development of accountability,the nature of government audit,laws and regulations,as well as the practice of government audit.This study explores the role of government audit in facilitating ’ supply-side structural reform’from monitoring(the basic function of government audit)to prevention,early warning,rectification,and repairment(the derived function of government audit).The path of government audit to promote ’supply-side structural reform’ includes improving institution design,monitoring economic power,evaluating policy implementation,and auditing financial statements.The construction of the theoretical framework enriches the research relating with the consequences of government audit,and is conducive to understanding the important role of government audit in promoting ’ supply-side structural reform’.(2)Enriching the empirical study of government audit promoting ’ supply-side structural reform’.Existing literature discusses the effect of government audit on the’supply-side structural reform’ theoretically.Empirical research testing the relationship between government audit and ’supply-side structural reform’ is relatively scarce,which may due to data limitation.Using the provinces and central SOEs as samples,this study tests the role of government audit in the’supply-side structural reform’ empirically at both the local government and the central SOEs level.This study makes up for the shortcomings of the existing research and provides foundation for future research.(3)Proposing the path of government audit to promote ’supply-side structural reform’.The way of government audit promoting the ’supply-side structural reform’guarantees the function of government audit.Combining the characteristics of government audit,the inherent meaning of ’ supply-side structural reform’ and the specific problems faced by government audit in promoting ’supply-side structural reform’ in practice,this study puts forward the path for government audit to promote ’supply-side structural reform’ from the perspective of advancing the full coverage of government audit,improving the institutions of government audit,innovating the methods of government audit,and enriching the types of government audit.This study provides reference for the practice of government audit. |
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