system. The socialist system with Chinese characteristics constitutes a systemic basis for the introduction and development of the current audit structure, and determines the mode of China’s auditing system. Meanwhile, China’s excellent traditional culture and socialist core values combine to serve as the necessary cultural basis. From this, one sees that the auditing system of socialism with Chinese characteristics is rooted in confidence in the road adopted in regard to theory, system, culture and practice, ensuring continued strong vitality.
The auditing system of socialism with Chinese characteristics originates from practice, and is the condensation and sublimation of audit practices stretching over a long period. China’s auditing system has a history of over 3,000 years, and auditing has been conducted under the leadership of the Communist Party of China for nearly 100 years and the auditing system of the People’s Republic of China has been established for almost 40 years. Its great practical experience involves rich thought and profound rules. A careful study shows that national governance has created different needs to meet the demands of the goals and changing modes in different periods, with the business scope of state audit, institutions and work functions determined and adjusted based on the objective need of national governance; no matter what it has done, it has effective national governance as its clear goal. Judging from the basic elements of national governance, this calls for comprehensive exploitation, management and control of people, money, materials and events, with power and responsibility reflected in each element. State audit, as an important tool in national governance, is conducted always with a strong sense of audit responsibility, a work attitude involving “things, officials and capital, all open to auditing”. In other words, auditing should be conducted to ensure it can play its due role in “exercising power, choosing the right person for the right position, and managing money matters”, and to achieve national governance and safeguard public interests through supervising and restricting the exercise of power. The formation of the auditing system of socialism with Chinese characteristics is a result of the self-reflection of China, and especially the valuable experience China has gained in the transformation of its economic system, and the auditing system is also based on summarizing and abstracting valuable experience indispensable for auditing, and filtering elements unsuited to the auditing system and, on this basis, further improving its ability to benefit national governance through innovation.
The auditing system of socialism with Chinese characteristics pays attention to the historical inheritance and absorption and reference ensuring an open and inclusive system. All rivers run into sea, and tolerance is a virtue. Chinese people have, since ancient times, been advocating “self-examination”, “emulating those better than oneself”, and “learning from the strong points of others and making up for one’s own weakness”. For a nation, system consciousness is of special significance. In the introduction and improvement of its auditing system, China never forgets to learn, with an open mind, from the successful auditing experiences of other countries, and traditional thinking of rich ideals and value and information reflected in other country’s systems and theories. Meanwhile, China works hard to monitor the latest auditing practice of major developed countries so as to learn from their successful experience for use in improving our own auditing system unique to the nation. From this we see China has traversed a road featuring absorbing anything and everything, independence, and scientific development.
This book is divided into five chapters: The Birth and Development of the Auditing System of Socialism with Chinese Characteristics; Foundation of the Auditing System of Socialism with Chinese Characteristics; Basic Framework of the Auditing System of Socialism with Chinese Characteristics; Features, Effects and Experience of the Auditing System of Socialism with Chinese Characteristics; and Development of the Auditing System of Socialism with Chinese Characteristics and Prospects. It comprehensively tells how the auditing system of socialism with Chinese characteristics was introduced and developed, and the way it has involved historical law and logic; the purpose is to make a profound and systematic analysis of China’s auditing system at the time when China is in the transitional period of its economy and society. It also outlines the blueprint concerning auditing system reform in a period when China is working hard to deepen its reforms and implement the rule of law. This is a sister book to the Study on the Auditing Theory of Socialism with Chinese Characteristics. Both have been created on the basis of understanding of the essence of China’s state audit; they come down in one continuous line, and complement each other. With different study objects, they meet in the auditing system of socialism with Chinese characteristics.
This book was written, but revised several times, over three years. During this period, we profoundly sought knowledge of the historical process concerning the introduction and development of the auditing system of socialism with Chinese characteristics so as to create a book of great value to the lofty mission of the state audit, and thus making due contribution to the modernization of the national governance system and capabilities.
In this colorful and exciting world of ours today, we dedicate this book to all my dear fellow auditors.
Introduction
THE AUDITING SYSTEM OF A COUNTRY, as an integral part of its institutional framework, is closely related to its history, culture, politics, and economy, as well as social development level and the soundness of its national governance. Under the leadership of the Communist Party of China (CPC), the auditing system of socialism with Chinese characteristics has been established and developed based on long-time Chinese and foreign audit experience and the experience of other countries, while adapting to the needs of reform and opening up, scientific socioeconomic development, democracy and rule of law, and the modernization of the national governance system and expansion of capacity. As a component of socialist system with Chinese characteristics, the auditing system has a wealth of connotations and historical characteristics.
1. ABOUT THE SYSTEMS
A system can be viewed in both broad and narrow senses. In a broad sense, it refers to a normative system of politics, economy, society and culture forming under certain historic conditions, that is, political system, economic system, social management system, and so forth. In a narrow sense, it refers to work procedures or action guidelines by which all parties should abide. As Karl Marx pointed out in Capital, a social system is a political instrument of a specific ruling class. It is a social structural framework of productive relations in a particular period, and also a fundamental rule of people’s economic actions at a specific productivity level. The fundamental driving force for system evolution comes from the development of productive forces. Some scholars, however, defined system from different perspectives. For example, Douglass C. North has argued that a system involves the game rule of a society. Theodore William Schultz saw it as a code of conduct governing the acts of a society, its politics, and its economy. John Rawls defined it as a kind of social system of norms, and so forth. Despite these different definitions, it can be concluded that a system has three basic features.
First, system has a historical feature. The generation of systems is not different from other products of human civilization. Systems did not exist intrinsically but were products of the development of human society at a certain historical stage. Marxism thought that the form, model, and level of systems were adaptable to the development level of productive forces, that is, “Production and subsequent exchange of products are the foundation of all social systems”1; “There will be particular social systems, families, classes or class organizations at a certain development stage of production, exchange and consumption.” 2 Development and changes of systems reveal they are also reforming and adapting to the development of human society. “No system can come out of nothing abruptly. A system is gradually developed based on the original source. A system will never disappear without any reason, and there must be changes. A system would be gradually deteriorating and changing before its disappearance. Only in such a manner can we seize the truth of all systems.”3
Engels:
Chien Mu,
