Reform of China's Audit System Under Xi Jinping
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Since Xi Jinping became the Supreme Leader of the People's Republic of China in 2013, the policy that has resonated most with the Chinese people is his serious crackdown on corruption under the campaign known as Killing Tigers and Swatting Flies.
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With Xi Jinping's humble demeanor, he has become a kind and charismatic leader. However, when it comes to action, he is swift, decisive, and strict, showing no leniency. Over the past five years, China's anti-corruption efforts have often been described as "serious and without theatrics"<\/span><\/strong>.
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The Chinese government's anti-corruption campaign can be categorized into two types: targeting party members and targeting state officials.
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The first type of anti-corruption involves dealing with corrupt party members, often leaders promoted from within the party. The government has the Central Commission for Discipline Inspection (CCDI), which has become increasingly influential over time.<\/p>
Earlier this year, the CCDI announced its latest report stating that in 2017, it disciplined 527,000 party members, including 58 officials at the ministerial level .
Currently, Xi Jinping has appointed Zhao Leji as the Secretary of the CCDI.<\/strong>
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In a way, the CCDI acts as the "iron fist" that Xi Jinping uses to suppress corrupt party members. However, on the flip side, the CCDI is also a tool that the President uses to deal with political enemies who have scandals related to corruption (notable examples include Bo Xilai and Zhou Yongkang).
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In addition to the CCDI, Xi Jinping has also utilized the Chinese National Audit Office (CNAO) to prevent and combat corruption.
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The CNAO was established in 1983, primarily responsible for auditing the accuracy of state agencies that use public funds. However, the CNAO has not been heavily involved in corruption issues, as it typically reports any irregularities to the police or relevant agencies for further action.
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The CNAO gained more recognition starting in 2003 when former Auditor General Li Jinhua presented a comprehensive report on the CNAO's auditing work to the 10th National Congress of the Communist Party, revealing a significant amount of corruption discovered during audits, which raised concerns about corruption issues threatening Chinese society.
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The impact of that event led to the term "Audit Storm" in Chinese political circles, as once Li Jinhua presented the report to the party congress, Chinese media reported on it, turning it into a hot topic in Chinese society, leading to a massive audit that made society realize that corruption was no longer a trivial issue.
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The CNAO continues to perform its auditing duties effectively, developing its auditing work to stand out on the global stage.
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After the Audit Storm, the CNAO developed a new auditing approach called Real-time Audit during Liu Jiayi's tenure as Auditor General. The concept of Real-time Audit is to conduct audits in real-time to prevent potential damage to public funds before disbursement.
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The origin of Real-time Audit began after the major earthquake in Sichuan in 2008, which required massive budget allocations from both the central and local governments for recovery efforts. However, as aid money flowed into the disaster area, opportunities for leakage and corruption easily arose. Therefore, the CNAO adopted a method of auditing from the project's inception, during its execution, and following the progress of the aid project without waiting for its completion.
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Source: http://en.sdcom.gov.cn/attachments/image/20180309/901d93ae-30cf-4a59-b241-e956c090e62d.jpg<\/figcaption> <\/figure>
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Subsequently, the concept of Real-time Audit has been supported by rapidly advancing auditing technology, especially in an era where Big Data Analytics has become a crucial tool in transforming every sector, including public auditing.1<\/sup>
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In addition to Real-time Audit, the CNAO also conducts another type of audit called Economic Accountability Audit, which audits executives of state-owned enterprises (SOEs) who, after leaving their positions, must declare their assets for the CNAO to verify any changes in their personal wealth.
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In simple terms, the CNAO audits the asset declarations of party members assigned to important positions.
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After Xi Jinping came to power in 2013, the anti-corruption crackdown became a key policy. Importantly, Xi has been serious about it, showing no fear of anyone... Xi Jinping has assigned Premier Li Keqiang to oversee the CNAO.
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During Xi Jinping's era, the CNAO has acted as a "silent guardian" because all the corruption scandals that have become issues in Chinese society stem from the CNAO's audits.
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Xi Jinping has encouraged the auditors of the CNAO by stating that their auditing work is like a "sword" that combats corruption.
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As mentioned earlier, Xi Jinping is a leader who is "soft on the outside but tough on the inside." He places great importance on serious auditing, especially after the 19th Party Congress last year, where he reorganized and restructured to ensure smooth governance during his second term.
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One of the agencies that has been reformed and overhauled is the CNAO.
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After Liu Jiayi's term as Auditor General ended, Xi Jinping appointed Hu Zejun as the new Auditor General.
Madam Hu is the first female Auditor General in China.
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At the same time, Xi Jinping has reformed China's audit system by centralizing power into the Central Audit Committee, which he chairs, with Li Keqiang and Zhao Leji from the CCDI as vice-chairs.
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This reform of China's audit system involves merging agencies responsible for overseeing, auditing, and monitoring state-owned enterprises and agencies under the Ministry of Finance that manage disbursement oversight, as well as agencies monitoring major projects in China... These agencies have been merged into the CNAO, with the Central Audit Committee overseeing, providing policies, and monitoring significant audit results.
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This reform of China's audit system marks a significant step in preventing and combating corruption in Chinese society, with Xi Jinping as the leading commander.
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- From the "Operation to Eliminate Flies and Tigers" to Xi Jinping's "Operation to Hunt Down Foxes 2014". <\/ul>
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Note 1. Currently, the CNAO chairs the Working Group on Big Data Development for Auditing of the International Organization of Supreme Audit Institutions (INTOSAI).
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