China's Auditor-General Li Jinhua on Thursday urged internal auditing bodies to conduct more management audits of enterprises to improve their financial and management performance.
At a council meeting chaired by the China Institute of Internal Audit (CIIA) in Beijing, Li said that income and expenses audits that only aim at correcting errors and exposing cheating cannot meet the needs of economic development.
Internal audits should play a more important role in improving economic growth and should provide consultation to decision makers, Li said.
He said sustainable development stresses better internal management and the integrated use of resources during the transition period.
Li encouraged internal auditing bodies to take an active part in supervising and evaluating enterprises' operating activities, risk management and internal control.
He added that due to the lack of authenticity and legitimacy, income and expenses audits are still two of the more effective ways to improve financial performance.
Li said cost-effectiveness audit and management audits are key, and highlighted that audits are both a checking and controlling system.
The objective over the next five years for Chinese internal auditing bodies established by the CIIA is to integrate income and expenses audits with internal control and risk management audits.
The CIIA was founded in 1987. There are an estimated 82,000 internal auditing bodies and more than 200,000 internal auditors in China.
(Xinhua News Agency January 13, 2006)
