Chapter III  

Duties and Responsibilities of Audit Institutions

Article 18 An audit institution shall exercise auditing oversight over the budget implementation, the final accounts, and other revenue and expenditure of the departments (including the entities directly affiliated to them) of the people's government at the same level and of the people's governments at lower levels.

Article 19 The National Audit Office shall, under the leadership of the Premier of the State Council, exercise auditing oversight over the budget implementation and the draft final accounts, as well as other revenue and expenditure of the Central Government, and submit the audit reports thereon to the Premier.

Local audit institutions at all levels shall, under the respective leadership of the governors of provinces, governors of autonomous regions, mayors, prefects of prefectures, and heads of counties or municipal districts, as well as under the leadership of the audit institutions at the next level up, exercise auditing oversight over the budget implementation, draft final accounts, as well as other revenue and expenditure of the people's governments at the same level, and submit audit reports thereon to the people's governments at the same level and to the audit institutions at the next level up.

Article 20  The National Audit Office shall exercise auditing oversight over the revenue and expenditure of the central bank.

Article 21  An audit institution shall exercise auditing oversight over the revenue and expenditure of the state institutions as well as other public institutions that use fiscal funds.

Article 22 An audit institution shall exercise auditing oversight over the assets, liabilities, profits, losses, and other revenue and expenditure of the state-owned enterprises, state-owned financial institutions, and the enterprises or financial institutions controlled or dominated by the state-owned capital.

Under the circumstances that major fiscal or financial interests of the state are involved, the National Audit Office may, for the purpose of safeguarding the national economic security and upon approval by the State Council, conduct special audit investigations or audits of the financial institutions other than those specified in the preceding paragraph.

Article 23 An audit institution shall exercise auditing oversight over the budget implementation and final accounts of the construction projects fully or mainly invested by the government, and the management and use of the funds as well as the construction and operation of other major public works involving national and public interests.

Article 24 An audit institution shall exercise auditing oversight over the state-owned resources and assets.

An audit institution shall exercise auditing oversight over the revenue and expenditure of the social insurance funds, the National Social Security Fund, the public donations, and other public funds which are managed by government departments or by other government-delegated entities.

Article 25 An audit institution shall exercise auditing oversight over the revenue and expenditure of the projects for which aid or loans are provided by international organizations or by the governments of other countries.

Article 26 An audit institution shall exercise auditing oversight over the auditees' implementation of the major state economic and social policy measures in accordance with the approved plans of audit assignments.

Article 27 In addition to the audit matters as specified in this Law, an audit institution shall, in accordance with the provisions of this Law and other relevant laws and administrative regulations, exercise auditing oversight over the matters that are subject to audit as provided by other laws and administrative regulations.

Article 28 An audit institution may conduct a comprehensive audit of all matters of an auditee that are required to be audited by law, or conduct a special audit of a specific matter thereof.

Article 29 An audit institution shall have the authority to conduct special audit investigations into specific matters relating to the state’s budgetary revenue and expenditure in the relevant local people's governments, government departments, and other entities, and report the results to the people's government at the same level and to the audit institution at the next level up.

Article 30 Where risks and potential dangers in economic and social operation are identified by an audit institution in the process of performing its audit duties and responsibilities, it shall, in a timely manner, report them to the people's government at the same level or notify the competent organ or entity thereof.

Article 31 An audit institution shall determine its audit jurisdiction based on the auditee's fiscal or financial affiliation, or the supervisory and managerial relationship arising from the state-owned resources and assets.

Where a dispute arises over the audit jurisdiction between or among the audit institutions, it shall be determined by an audit institution superior to the disputing parties.

An audit institution at a higher level may, regarding a matter within its audit jurisdiction, authorize an audit institution at a lower level to audit the matter, except that any matter specified in Article 18 through Article 20 of this Law may not be delegated to an audit institution at a lower level. An audit institution at a higher level may directly audit a major matter falling within the audit jurisdiction of a lower-level audit institution; provided, however, any unnecessary repetitive audit shall be avoided.

Article 32 An auditee shall strengthen its leadership over the internal audit work, and establish and improve its internal audit system in accordance with relevant state regulations.

An audit institution shall provide professional guidance on and supervision over the internal audit work of the auditees.

Article 33 Where an entity required by law to be audited by an audit institution, has been audited by a public accounting firm, the audit institution shall have the authority to verify the audit reports produced by the firm in accordance with the regulations of the State Council.

Chapter IV 

Authorities of Audit Institutions

Article 34 An audit institution shall have the authority to require an auditee to provide the financial and accounting information, and business, management, and other information relating to its revenue and expenditure, including electronic data and the relevant documents, in accordance with the specifications made by the audit institution. The auditee shall not refuse, delay the provision thereof, or make a false report.

The leading person of an auditee shall be responsible for the timeliness, authenticity, and completeness of the information provided by the auditee.

Where an audit institution needs to verify the information with an auditee in the process of conducting comprehensive analyses of the electronic data and other information obtained therefrom, the auditee shall cooperate.

Article 35 The government information systems and data sharing platforms shall be made accessible to audit institutions in accordance with regulations.

Where the electronic data and other information obtained by an audit institution through the government information systems and data sharing platforms suffice to meet the needs, the audit institution shall not require the auditee to duplicate the provision.

Article 36 When conducting an audit, an audit institution shall have the authority to examine an auditee's financial and accounting information, and the business, management, and other information and assets relating to its revenue and expenditure, and to examine the security, reliability, and economy of the auditee's information system, and the auditee shall not refuse.

Article 37 When conducting an audit, an audit institution shall have the authority to carry out investigation into the issues relating to the audit matter of the relevant entities or individuals and obtain the supporting documents. The relevant entities and individuals shall cooperate with and assist the audit institution by truthfully providing it with the information and supporting documents.

An audit institution shall, upon approval by the leading person of the audit institution of the local people's government at or above the county level, have the authority to inquire about an auditee's account with a financial institution.

Where there is evidence proving that an auditee has, in violation of the state regulations, transferred public funds to an account opened with a financial institution by any other entity or individual, an audit institution shall have the authority to inquire about the deposits of the relevant entity or individual related to the audited matter upon approval of the principal leading person of the audit institution of the local people's government at or above the county level.

Article 38 When an audit institution is conducting an audit, the auditee shall not transfer, conceal, falsify, or destroy the financial or accounting information, and the business, management, or other information relating to its revenue and expenditure, and  shall not transfer, conceal, or intentionally damage the assets in its possession that are obtained in violation of the state regulations.

An audit institution shall have the authority to stop an ongoing act carried out by an auditee in violation of the provisions in the preceding paragraph; when necessary, upon approval of the leading person of the audit institution of the people's government at or above the county level, the audit institution has the authority to seal up the relevant documents and the assets obtained in violation of the state regulations. Where it is necessary to freeze the relevant funds deposited into the account of the auditee with a financial institution, the audit institution shall submit such an application to a people's court.

An audit institution shall have the authority to stop an ongoing act carried out by an auditee in violation of the state regulations governing the revenue and expenditure; if such an effort fails, it shall, upon approval of the leading person of the audit institution of the people’s government at or above the county level, notify the department of finance and the competent organs or entities to suspend allocation of funds directly related to the violation or, if the funds have already been allocated, to suspend the use thereof.

The measures taken by an audit institution as specified in the preceding two paragraphs shall not adversely affect the lawful business, production, or operation activities of the auditee.

Article 39 Where an audit institution considers that the rules made by a competent organ or entity at a higher level governing the relevant revenue and expenditure, which are followed by an auditee, are against the laws or administrative regulations, the audit institution shall recommend the relevant organ or entity to revise such rules. If the said organ or entity fails to do so, the audit institution shall refer the matter to the organ or entity with the authority over such matters to handle it in accordance with law.

Article 40 An audit institution may inform the relevant government departments of audit results or announce them to the public.

When informing the relevant entities of or announcing the audit results, the audit institution shall keep confidential the state secrets, work-related secrets, trade secrets, and  personal privacy and personal information, and observe the laws, administrative regulations, and the relevant regulations of the State Council.

Article 41 When performing its duties and responsibilities of auditing oversight, an audit institution may request competent organs of public security, public finance, natural resources, ecology and environment, customs, taxation, market regulation, etc. for assistance. The relevant organs shall cooperate therewith in accordance with law.