Audit Law of the People's Republic of China

(Adopted at the 9th Meeting of the Standing Committee of the Eighth National People's Congress on August 31, 1994; amended for the first time in accordance with the Decision on Amending the Audit Law of the People's Republic of China adopted at the 20th Meeting of the Standing Committee of the Tenth National People's Congress on February 28, 2006; and amended for the second time in accordance with the Decision on Amending the Audit Law of the People's Republic of China adopted at the 31st Meeting of the Standing Committee of the Thirteenth National People's Congress on October 23, 2021)

Contents

Chapter I General Provisions

Chapter II Audit Institutions and Auditors

Chapter III Duties and Responsibilities of Audit Institutions

Chapter IV Authorities of Audit Institutions

Chapter V Audit Procedures

Chapter VI Legal Liability

Chapter VII Supplementary Provisions

Chapter I 

General Provisions

Article 1 This Law is formulated in accordance with the Constitution for the purposes of strengthening auditing oversight, maintaining the fiscal and economic order of the state, improving the use efficiency of fiscal funds, promoting the building of a clean government, and ensuring the sound development of the national economy and society.

Article 2 The state implements a system of auditing oversight, and upholds the leadership of the Communist Party of China over audit work to build a centralized, unified, authoritative, and efficient audit system with comprehensive coverage.

The State Council and the local people's governments at or above the county level each shall establish an audit institution.

The revenue and expenditure of all State Council departments, the local people's governments at all levels as well as the various departments thereof, the revenue and expenditure of the state-owned financial institutions, enterprises, and other institutions, and other revenue and expenditure which are subject to audit according to this Law, shall be audited in accordance with the provisions of this Law.

An audit institution shall, in accordance with law, exercise auditing oversight over the revenue and expenditure specified in the preceding paragraph to verify its authenticity, lawfulness, and effectiveness.

Article 3 An audit institution shall perform audits within the scope of its authorities and in accordance with the procedures provided by law.

An audit institution shall, in accordance with laws and regulations governing revenue and expenditure, and other relevant state regulations, conduct audit appraisals and make audit decisions within the scope of its statutory authorities.

Article 4 The State Council and the local people's governments at or above the county level each shall annually present the audit work report to the standing committee of the people's congress at the same level. The report shall cover the audit results of budget implementation, draft final accounts, and other revenue and expenditure, especially focusing on the audit results of budget implementation and performance. The report shall also cover the audit results of the state-owned resources and assets in accordance with relevant laws and administrative regulations. When necessary, the standing committee of the people's congress may adopt a resolution on the report.

The State Council and the local people's governments at or above the county level each shall report to the standing committee of the people's congress at the same level the rectification results of the issues identified in the report.

Article 5 An audit institution shall independently exercise its authority of auditing oversight in accordance with law, free from interference by any administrative authority, social organization, or individual.

Article 6 In handling audit matters, an audit institution or auditor shall be objective, fair, honest, and shall seek truth from facts and keep secrets.

Chapter II 

Audit Institutions and Auditors

Article 7 The State Council establishes the National Audit Office to take charge of the auditing oversight nationwide under the leadership of the Premier of the State Council. The Auditor General is the administrative head of the National Audit Office.

Article 8 The audit institution of the people's government of a province, an autonomous region, a municipality directly under the central government, a city divided into districts, an autonomous prefecture, a county, an autonomous county, a city not divided into districts, and a municipal district shall take charge of the auditing oversight within the administrative area it is located in, under the leadership of the governor of the province, the governor of the autonomous region, the mayor, the prefect of the prefecture, the head of the county, the head of the municipal district, as well as under the leadership of the audit institution at the next level up.

Article 9 Local audit institutions at all levels each shall be responsible to and shall report their work to the people's governments at the same level and to the audit institutions at the next level up, whereas the audit business shall be directed primarily by the audit institutions at higher levels.

Article 10 An audit institution may, on a need basis and upon approval by the people's government at the same level, establish outposted audit offices in the area under its jurisdiction.

An outposted audit office shall, upon authorization of the audit institution, conduct audits in accordance with law.

Article 11  The funds necessary for an audit institution to perform its duties and responsibilities shall be budgeted and guaranteed.

Article 12  Audit institutions shall see that auditors are competent and professional, firm in ideal and conviction, willing to serve the people, proficient and practical in work, ready to take on responsibilities, and honest and upright.

Audit institutions shall strengthen the supervision over the auditors' legal compliance and performance of duties and responsibilities, and urge them to act with due diligence in accordance with law.

Audit institutions and auditors are subject to supervision according to law.

Article 13 An auditor shall possess the professional knowledge and ability commensurate with the audit work engaged in.

An audit institution may, on a need basis, hire persons with professional knowledge related to the audit matters to participate in the audit.

Article 14  No audit institution or auditor may engage in any activity that may affect the law-based independent performance of the duties and responsibilities of auditing oversight, or interfere with any normal business operation and management activity of an auditee and the relevant entity thereof.

Article 15 In handling the audit matters, an auditor who has an interest in an auditee or an audit matter shall withdraw from the audit.

Article 16  Audit institutions and auditors shall keep confidential the state secrets, work-related secrets, trade secrets, and personal privacy and personal information which they become aware of in the process of performing their duties, and shall not divulge or illegally provide such information to others.

Article 17 Auditors are protected by law in performing their duties in accordance with law.

No organization or individual shall refuse auditors to perform, or obstruct them from performing their duties in accordance with law, or retaliate against them.

Leading persons of audit institutions shall be appointed or removed in accordance with the statutory procedure. They shall not be removed or replaced unless they violate laws or neglect their duties, or are otherwise disqualified for the post.

Leading persons of local audit institutions at various levels shall be appointed or removed after consultation is made with the audit institution at the next level up.