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Opinion: Strengthening audit efforts
( 2002-08-08 09:58 ) (1 )

Mindful that corporate scandals are detrimental to the establishment of a sound market order, the Chinese Government has drummed up efforts to ensure accountability of cadres and leaders in State-owned and State-holding companies.

According to the National Audit Office, it has completed economic responsibility audits on almost 60,000 government cadres and leaders of State companies at all levels over the past two years.

The malpractice and abuse exposed by the audits involve more than 115.6 billion yuan (US$14 billion). About 5.4 billion yuan (US$655 million) has not been recovered and may have been lost or squandered.

The figure is alarming, especially because the amount of money uncovered by audits last year had increased sharply year-on-year by 73 per cent.

A more stringent investigating system and widening of the audits' terms of reference are partly responsible for the increase. Such vigorous efforts not only expose and prevent the loss of State assets, but increases the accountability of cadres and leaders of State companies who would generally demand public confidence in government systems.

All results provide a valuable gauge to the performance of cadres.

Based on audits, more than 3,800 people have either been demoted or removed from office and 370 have been transferred to judicial departments for prosecution.

Under the audit system, disqualified and fraudulent cadres will be banned from office.

It serves as a strong warning to cadres in higher positions that they cannot act irresponsibly and any perpetrators will be dealt with.

However, the audit system may only be the beginning. After uncovering a huge amount of fraudulent activity and abuse of power it shows that there are still many problems demanding urgent investigation. Supervision should be increased over the financial activities of cadres or leaders.

The audit department should further expand its effort to pursue every case and deliver a punishment.