Regulation on the Implementation of the Audit Law of the People's Republic of China (2010 Revision)

Regulation on the Implementation of the Audit Law of the People's Republic of China (2010 Revision)

Order of the State Council of the People's Republic of China
(No.571)

The Regulation on the Implementation of the Audit Law of the People's Republic of China, as amended, which was adopted at the 100th executive meeting of the State Council on February 2, 2010, is hereby promulgated, and shall come into force on May 1, 2010.
Premier: Wen Jiabao
February 11, 2010
Regulation on the Implementation of the Audit Law of the People's Republic of China
(Promulgated by Order No.231 of the State Council of the People's Republic of China on October 21, 1997, amended and adopted at the 100th executive meeting of the State Council on February 2, 2010)
Chapter I General Provisions
Article 1 This Regulation is formulated pursuant to the Audit Law of the People's Republic of China (hereinafter referred to as “Audit Law”).
Article 2 The term “audit” as mentioned in the Audit Law means an auditing organ independent inspection on an auditee's accounting vouchers, accounting books, financial statements and other documents and assets related to government revenues and expenditures and financial revenues and expenditures so as to check the truthfulness, legitimacy and benefits of government revenues and expenditures and financial revenues and expenditures.
Article 3 The term “government revenues and expenditures” as mentioned in the Audit Law refers to revenues and expenditures subject to budget control as well as those not subject to budget control among the following financial funds as determined pursuant to the Budget Law of the People's Republic of China and other relevant provisions of the state:
1. Administrative fees;
2. Income from state-owned resources and assets;
3. Operating income from state-owned capital that should be turned in;
4. Funds raised by and in the name of the government; and
5. Other financial funds beyond budget control.
Article 4 The term “financial revenues and expenditures” as mentioned in the Audit Law refers to the revenues and expenditures the accounting of which are handled by state-owned financial institutions, enterprises and public institutions as well as other entities subject to the audit supervision of auditing organs according to the financial and accounting rules of the state.
Article 5 Auditing organs shall conduct audit supervision according to the duties, powers and procedures prescribed by the Audit Law, this Regulation and other relevant laws and regulations.
Auditing organs shall make auditing evaluations pursuant to laws, regulations and the relevant policies, standards and project objectives of the state, and decide the handling or punishment of the auditees' violations of the state provisions regarding government or financial revenues and expenditures within the scope of statutory authorities.
Article 6 All entities and individuals have the right to report to the auditing organs the government or financial revenue and expenditure violations of the entities subject to the audit supervision of auditing organs. Auditing organs shall promptly handle such tip-offs.
Chapter II Auditing Organs and Auditors
Article 7 The National Audit Office shall, under the leadership of the Premier of the State Council, be responsible for the auditing work of the whole nation and fulfill the functions and duties prescribed by the Audit Law or the State Council.
The local auditing organs at all levels shall, under the leadership of the chief administrative officers of the people's governments at the same level and the auditing organs at the next higher level, be responsible for the auditing work of their respective administrative regions and fulfill the functions and duties prescribed by laws, regulations and the people's governments at the same level.
Article 8 The auditing organ of a local office, if any, of the people's government of a province or autonomous region shall be responsible for and report to the local office and the auditing organ of the people's government of the province or autonomous region, and its auditing business shall be mainly led by the auditing organ of the people's government of the province or autonomous region.
Article 9 A local office of an auditing organ shall carry out the auditing work within the scope of authority granted by the auditing organ pursuant to laws, regulations and the provisions of the auditing organ. No other administrative organ, social organization or individual may intervene with its work.
Article 10 The basis for an auditing organ to make an annual appropriation budget draft includes:
1. Laws and regulations;
2. The decisions and requirements of the people's governments at the same level;
3. The annual audit plan of the auditing organ;
4. The fixed number of employees and fixed quotas of work of the auditing organ; and
5. The implementation of last year's appropriation budget and varieties of this year.
Article 11 Auditors shall meet the auditing technical qualification requirements, the specifics of which shall be governed by the relevant state provisions.
If necessary, auditing organs may hire professionals in fields related to the audit items to get involved in the auditing work.
Article 12 Under any of the following circumstances, an auditor shall apply for withdrawal, and the auditee also has the right to request the auditor to withdraw:
1. The auditor has a conjugal relationship, lineal descent relationship, collateral kinship within three generations or lineal affinity with the person in charge or any executive of the auditee;
2. The auditor has an economic interest relationship with the auditee or the audit item; or
3. The auditor has any other interest relationship with the auditee, the audit item or the person in charge or any executive of the auditee, which may affect his impartial performance of duty.
The withdrawal of an auditor shall be decided by the person in charge of the auditing organ. The withdrawal of the person in charge of the auditing organ from the handling of audit matters shall be decided by the person in charge of the people's government at the same level or the auditing organ at the next higher level.
Article 13 For the appointment and removal of persons holding chief or deputy posts in the auditing organs of the local governments at all levels, the opinions of the auditing organs at the next higher level must be solicited beforehand.
Article 14 The person in charge of an auditing organ may not be replaced without approval unless:
1. He is under investigation due to a criminal charge;
2. He receives a disciplinary sanction due to a gross violation of law or neglection of duty and is no longer appropriate to hold the office;
3. He fails to perform duties for more than one year due to health problems; or
4. He fails to meet any other eligibility requirements of the state.
Chapter III Functions and Duties of Auditing Organs
Article 15 An auditing organ shall make audit supervision over the budget execution of the financial department of the people's government at this level, the collection of budgetary revenues by the budgetary revenue collecting department at this level, the budgetary performance and final accounts of the departments or entities directly relating to the financial department of the people's government at this level in terms of budgetary payment or appropriation, the budgetary performance and final accounts of the people's governments at lower levels, and other government revenues and expenditures. Upon the approval of the people's government at the same level, an auditing organ may make audit supervision over the entities and projects to which financial funds are appropriated in respect of the authenticity, lawfulness and efficiency of their acceptance and utilization of financial funds.
Article 16 Items subject to the audit supervision of an auditing organ regarding the performance of the budgetary revenues and expenditures at the same level include:
1. Budgetary replies made by the financial department to all departments at the same level (and entities directly under them) based on the budget approved by the people's congress at this level, adjustments made in the budget execution of this level, and changes in budgetary revenues and expenditures;
2. Collection of budgetary revenues by the budgetary revenue collecting department in accordance with the laws, administrative regulations and other relevant state provisions;
3. Appropriation of budgetary expenditures made by the financial department for this level based on the approved annual budget or fund use plan and the prescribed budgetary levels and procedures;
4. Appropriation, management, settlement and carrying forward of financial funds for intergovernmental transfer payment by the financial department pursuant to laws, administrative regulations and the financial control rules;
5. Acceptance, division and detainment of budgetary revenues and appropriation of budgetary expenditures by the state treasury pursuant to the relevant state provisions;
6. Execution of the annual budget by all departments (and entities directly under them) at this level;
7. Revenues and expenditures of budgetary funds subject to special-purpose management as required by the relevant state provisions; and
8. Other aspects regarding budgetary performance as set forth by laws or regulations.
Article 17 The term “a report of audit findings” as mentioned in Article 17 of the Audit Law includes:
1. Basic situation about the budgetary performance and other government revenues and expenditures at the same level;
2. Audit evaluation results made by the auditing organ on the budgetary performance and other government revenues and expenditures at the same level;
3. Problems existing in the budgetary performance and other government revenues and expenditures at the same level, and countermeasures taken by the auditing organ;
4. Suggestions given by the auditing organ for improving the budgetary performance and other financial revenue and expenditure management work at the same level; and
5. Other aspects as required by the people's government at the same level.
Article 18 The National Audit Office shall make audit supervision on all financial revenues and expenditures incurred in the performance of functions and duties by the Central Bank and the branch offices thereof.
A report of audit findings as provided by the National Audit Office to the Premier of the State Council on the budgetary performance and other government revenues and expenditures at the central level shall include the audit results of the financial revenues and expenditures of the Central Bank.
Article 19 The term “enterprises and financial institutions in which state-owned assets play a controlling or dominant role” as mentioned in Article 21 of the Audit Law includes:
1. Those in which state-own......