The legal status of auditing and supervision in China has been explicitly written in the Constitution of the People¡¯s Republic of China (hereafter referred to as the Constitution).
Article 91 of the Constitution stipulates that: The State Council shall establish audit institution who will take charge of auditing revenues and expenditures of public finance of departments of the State Council and local governments at various levels, revenues and expenditures of state banking institutions, state enterprises and undertakings. The audit institution shall be under the direct leadership of the Premier of the State Council and exercise its power of supervision through auditing independently in accordance with the law and subject to no interference by any administrative organ or public organization or individual.
Article 109 of the Constitution stipulates that: People¡¯s governments at and above the county level shall establish corresponding audit institutions. Local audit institutions at various levels shall be accountable and report on their work to the people¡¯s governments at the corresponding levels and to audit institutions at the next higher levels.
Article 62, 67, 80 and 86 of the Constitution also stipulates that: the Auditor General shall be a member of the State Council. The Auditor General shall be nominated by the Premier and, subject to approval by the National People¡¯s Congress or its Standing Committee, shall be appointed or removed by the President of the State.
The administrative leaders of local audit institutions at various levels shall be members of the people¡¯s governments at the corresponding levels. They shall be appointed or removed in accordance with legal procedures. None of them may be removed or replaced at will unless they are found guilty of illegal acts, or negligent of duties, or no longer qualified for the post.