Research On Local Government Debt Audit Based On The Risk Prevention

With the rapid development of China’s economy, the local government debt problem has become increasingly prominent, which related to the social stability. Because of the influence of the tax reform in 1994 and the implementation of "VAT replaced sales tax" in 2012, local fiscal revenue sources has been reduced, limited financial income cannot meet the needs of economic development, local governments only can obtain funds through borrowing. There is no denying that debt is beneficial to promote economic development, but huge debt will inevitably produce risk, thus affect the social stability. By the end of June 2013, the local government responsible for repayment of the debt is 10.885917 trillion Yuan, in 2015, the number of new local government bonds is 6355.6 billion Yuan, which accounted for 16.58% of the whole bond market scale. Administrative institutions and state-owned enterprises around the country, once meet the debt difficulties, the government is obliged to repay the debt on behalf of these units, and the existence of these contingent liabilities undoubtedly increased the amount of debt around. At present, most study of local government debt focused on financial management, risk warning and audit. In order to improve our country’s debt management level, it is necessary to strengthen the prevention of debt risk, and deepen the audit of local government debt from this perspective, which is beneficial to improve the theory of audit model and the local government’ debt management awareness. Optimization of the audit model helps to enhance the efficiency and effectiveness of audit work, and gives full play to the role of the audit as the immune system, and ultimately helps to achieve stable development of society.In order to prevent debt risk, improve the audit model of our local government debt, and strengthen the supervision of local government, in this paper, I seen local government debt management, risk prevention and auditing as a whole, and used the methods of research literature, analysis trend and comparative. First of all, by reading a large number of the relevant literature, policies and regulations, I found the insufficient in domestic and foreign research, then I learned local government debt and risk status in our country, and analyzed local government debt trend in recent years, thus I found the loopholes in debt management, and combined with 3 times nationwide local government debt audit work organized by China Audit Office, I analyzed the current situation of local government debt audit. Secondly, I learned and summarized the risk prevention and audit model in 4 foreign countries; Again, I selected a range of indicators and evaluated the local government debt risk, then accordingly determine audit priorities, the risk prevention work will throughout the whole audit process, I designed the audit mode from the main body, the time and logic three dimensions:on the basis of government audit and internal audit, I introduced the social audit and public participation in the audit, and pay attention to the beforehand control and the matter control of audit, I applied the PDCA cycle to a variety of audit methods, and build the long-term safeguards mechanism for this model. In the end, I draw the conclusion, and put forward some suggestions to improve the local government debt audit, such as increasing the frequency of the audit, improving auditing practices, strengthening the coordination between departments, strengthening the construction of early warning mechanism and so on. Adopt these advices will help to strengthen the debt risk prevention, and make up the loopholes in debt management, ultimately improve the audit system.