Study On Audit Of Government Investment During Transition Period

In the modern world, the role of government gradually becomes the focus of attention. The issue was attended by the World Bank in its World Development Report 1997: The State in a Changing World, "Around the globe, the state is in the spotlight. Far-reaching developments in the global economy have us revisiting basic questions about government: what its role should be, what it can and cannot do, and how best to do it." Governmental investment is an important factor in promoting the development of economy and society. How to allocate the limited financial construction funds scientifically and reasonably so as to meet various social and public demands and to achieve maximum social benefits is not only the core issue in financial expenditure, but also an important part of responsibilities all levels of governments should fulfill.Government audit represents state power of auditing and supervision, which forms an important part in consummating the political system of a nation and strengthening its economic management. Audit of government investments deals with the conducting of investment. For twenty years, it has played an extremely important role in various fields, such as in promoting the effective implementation of active financial policies, in deepening reform in investment and financing systems, in strengthening project management, in rectifying and normalizing market orders, in maintaining finance and economics laws and disciplines as well as in punishing corruptions.In recent years of investment auditing, a number of problems that is common in government investment have emerged. Firstly, low efficiency, even failure, in projects caused by unscientific decision-makings. Secondly, ahead-investments led by inefficient obligation and risk restriction systems in project investments. Thirdly, investments out of control led by poor management in project construction or distempered inner-control systems. All these problems have directly led to low effectiveness in investments. The main causes of the problems can be ascribed to ineffective restriction and supervision on power, incommensurate administrative system, distempered legal system, poor management of project and so on.To solve the above-mentioned problems in investment, it is necessary for the audit departments to adjust the objective and emphasis of investment audit timingly, especially during the present period of economic transition when market economy is yet imperfect.The focus of audit should be transferred from the traditional way of government investment audit that only pay attention to investigating and dealing with projects that violate regulations or disciplines to effectiveness audit that centers upon system, while laying stress on restraint and supervision over power. At the same time, problems in macro-management, such as incommensurate administrative system and inadequate regulations and poor management, should be solved so as to implement effectiveness audit with Chinese-characteristics in government invested public projects, hi the launch of effectiveness audit in government investment, the audits of capital, project, financial expenditure and effectiveness should be combined appropriately with emphasis on decision-making, management, capital utilization and effectiveness of investments in the appraisal of its economy, efficiency and effectiveness. Moreover, we should gradually solve the problems existing in government investments in China in order to enhance effectiveness in the investments.