Research On Auditing Of Local Government Financing Platform At County Level

With the effects of economic reform, developments of Chinese economy are obvious increasingly, meanwhile, the rate of modernization and industrialization boosted dramatically than its corresponding countries. Nevertheless, this prosperous situation caused negative impacts on native government especially financial burden. Thus governments tend to encourage social sectors to invest funds into infrastructure fields in order to keep sustainable development. According to this background, investing and financing platforms are established by local governments. With the development of this trend, the disadvantages of investing and financing platforms controlled by county governments are revealed and recognized by regulatory department with the2011 China’s regional financial operation report. There are obvious distinctions between these platform which are considered as state- owned enterprise and private sectors. Supervision conducted by national department, apart from audit by certified accountants, are involved in these platforms more than their private counterparts.However, some negative aspects cannot be reduced by strict supervision due to the huge number of platforms; essentially, current measures are inefficient and ineffective to censor the situation of platforms.The size of investing and financing platform established by county government is small generally, it is ineffective to profit from society and provide service for banks,which lead in some illegal behaviors relate to audit. Meanwhile, as there are some privileges for these platforms, especially the governmental elements, risk evaluation might be neglected by auditors to some extent. On the other hand, feedback from auditing would be impacted slightly when auditor report the results, which would inhibit the effects of supervision. Although there are different types of audit(audit by particular departments, accounting firm and audit focus on constructive projects) to address these potential problems, differences in terms of objectives, criteria, contents and procedures result in disadvantages contained waste and repetitions. Bothdrawbacks disturb well-being of social economy and audit.The research concentrates on mechanism of operation about investing and financing platform controlled by county government associated with four aspects(law,management from government, audit inspection and social supervision) to explore the available factors for risks and necessity for supervision. And analyze the disadvantages of these platforms combined with theoretical and practical experiences;case studies(barriers in auditing) are involved as well.The objectives of this research are multiple, detailed explanations of risks are the most essential one, others, disadvantages of current audit inspection system and measures are taken into account. Promoting economic development from audit aspects is the priority of this research, and there are some suggestions aimed at effective audit inspection system with some results from both quantitative and qualitative research.