Article 1    These Provisions are formulated in accordance with the Audit Law of the People's Republic of China ( hereinafter referred to as the Audit Law)and other relevant laws and regulations for the purpose of standardizing mandatory administrative measures of audit adopted by audit institutions, ensuring and supervising the exercise of duties and powers by the audit institutions and protecting legal rights of the audited bodies and their staff.

Article 2    The term "mandatory administrative measures of audit" mentioned herein refers to measures adopted by audit institutions according to the law to compel the audited bodies and their staff to fulfill their statutory obligations for the purpose of ensuring smooth progress of auditing supervision and timely curbing, correcting and metering out sanctions or penalties against acts of revenues and expenditures committed by the audited bodies and their staff which are in violation of state stipulations.

Article 3    Mandatory administrative measures of audit shall include the following items:
(1) Warnings, circulation of notices of criticism and fines;
(2) Orders issued for the cessation and correction of acts in violation of the law;
(3) Orders issued for the adoption of remedial measures;
(4) Orders issued for the registration, preservation and surrender of relevant documents and assets illegally obtained;
(5) Notifications sent to financial departments and other competent authorities to suspend the allocation and payment of funds; orders issued to the audited bodies to suspend their utilization of funds;
(6) Temporary sequestration of accounts, books and computerized accounting systems used by the audited bodies for the management of their revenues and expenditures;
(7) Orders issued for the execution of audit decisions or review decisions within the prescribed time limit;
(8) Applications made to the people's courts for adoption of measures to preserve properties;
(9) Applications made to the people's courts for enforcement;
(10) Other mandatory administrative measures of audit stipulated by relevant laws and regulations.

Article 4    Audit institutions shall report their adoption or release of mandatory administrative measures of audit  for approval to competent leaders of audit institutions above the country level.

Article 5    Where the audited bodies and their staff commit one of the following violations of the Audit Law by rejecting or obstructing audit, audit institutions may order them to correct such acts or circulate notices of criticism, issue warnings or tickets of fines:
(1) Rejecting, delaying or falsifying the provision of relevant accounts and other documents related to revenues and expenditures;  
(2) Rejecting examination by audit institutions of accounting vouchers, books and statements and other documents and assets related to revenues and expenditures;
(3) Fraudulent provision of testimonial materials;
(4) Transfer, concealment, falsification and destruction of accounting vouchers, books and statements and other documents related to revenues and expenditures;
(5) Rejecting and obstructing audit examination in other ways.

For the above violations, audit institutions may also meter out mandatory administrative measures of audit according to other relevant stipulations in addition to the measures stipulated in the previous article.

Article 6     Where the audited bodies and their staff refuse to correct their violations even after the audit institutions adopt the measures stipulated in the previous article,  audit institutions shall make relevant investigations and affix legal responsibility on the audited bodies and their staff according to relevant laws and stipulations.

Article 7      With regard to ongoing acts of revenues and expenditures committed by the audited bodies and their staff which are in violation of the Audit Law or other state regulations, audit institutions may meter out the following mandatory administrative measures of audit:
(1) Ordering the audited bodies and their staff to cease and correct their violations or adopt remedial measures within the prescribed time limit;
(2) Ordering the audited bodies and their staff to surrender relevant documents and assets illegally obtained;
(3) Notifications sent to financial departments and other competent authorities to suspend the allocation and payment of funds directly related to acts  of  revenues and expenditures of the audited bodies which are in violation of state stipulations;
(4) Ordering the audited bodies to suspend the utilization of funds directly related to their acts of revenues and expenditures which are in violation of state stipulations; where the audited bodies refuse to enforce such orders, mandatory administrative measures of audit shall be metered out according to the previous three sections of this article;
(5)  Temporary sequestration of accounts and books and computerized accounting systems used by the audited bodies for the management of their revenues and expenditures.  Such sequestrated accounts and books and computerized accounting systems may be kept by the audited bodies but may also be kept by the audit institutions;
(6) Relevant documents of and assets illegally obtained by the audited bodies may be registered and preserved in advance where such documents and assets may dissolve, disappear or are hard to be obtained in the future;
(7) Imposing fines according to relevant stipulations on the audited bodies and their directly responsible leaders and other directly responsible individuals.

Article 8    Where audit institutions are well-grounded in their belief that the audited bodies may have transferred, concealed, falsified and destroyed accounting vouchers, books and statements and other documents related to revenues and expenditures, mandatory administrative measures of audit may be metered out where necessary and in accordance with the stipulations laid down in Sections (5) and (6) of the previous article.

Article 9   Where the audited bodies have already transferred, concealed, falsified and destroyed accounting vouchers, books and statements and other documents related to revenues and expenditures, audit institutions may meter out the following mandatory administrative measures of audit:
(1) Ordering the audited bodies to correct their violations within the prescribed time limit;
(2) Ordering the audited bodies to surrender the relevant documents;
(3) Ordering the audited bodies to adopt remedial measures;
(4) Adoption of other mandatory administrative measures of audit according to relevant laws and regulations.

Article 10    Where it is found that the audited bodies have transferred and concealed assets illegally obtained, audit institutions may meter out the following mandatory administrative measures of audit:
(1) Ordering the audited bodies to cease their violations immediately and correct such violations within the prescribed time limit;
(2) Ordering the audited bodies to surrender the assets illegally obtained;
(3) Application to the people's courts for the adoption of measures to preserve the concerned properties.

Article 11    Before applying to the people's courts for the adoption of measures to preserve the concerned assets, audit institutions may register and keep the assets illegally obtained by the audited bodies until the adoption of such preservation measures by the courts.

Application by the audit institutions to the people's courts for the adoption of measures to preserve the concerned assets shall be made together with the provision of relevant documents and materials to the people's courts of the localities where the audited bodies are situated.

Article 12    Where the audited bodies fail to implement audit decisions within the prescribed time limit without proper reasons, audit institutions may meter out the following mandatory administrative measures of audit:
(1) Ordering the audited bodies to implement audit decisions within the prescribed time limit;
(2) Ordering the audited bodies to surrender the concerned assets;
(3) Imposing demurrages and additional fines according to the law;
(4) Notifications to the financial departments and other competent authorities to reduce budgetary appropriation according to the law by the amount which should be surrendered by the audited bodies.

Where the audited bodies, without proper reasons, fail to implement audit decisions within the prescribed time limit and according to relevant requirements, audit institutions may also apply to the people's courts for enforcement.

Article 13    When adopting mandatory administrative measures of audit, audit institutions shall prepare and issue legal documents related to their audit according to relevant stipulations.

Article 14    Audit institutions shall make records of their mandatory administrative measures of audit such as ordering the audited bodies to cease their violations immediately and correct such violations within the prescribed time limit, ordering the audited bodies to surrender within the prescribed time limit relevant documents and assets illegally obtained, ordering the audited bodies to implement audit decisions or review decisions within the prescribed time limits and ordering the audited bodies to take remedial measures.

Article 15    Where audit institutions take the measure of registration and preservation, they shall prepare and issue notifications of such registration and preservation and lists of relevant accounting documents and assets to be registered and preserved.

The same list of accounting documents and assets to be registered and preserved shall be made in two copies, signed or stamped by the audit institutions and the audited bodies with each side keeping one such copy.

Audit institutions shall make decisions on the imposition of sanctions or penalties within 7 days of their adoption of the measure of registration and preservation.

Article 16    While adopting the measure of temporarily sequestrating accounts and books, audit institutions shall prepare and issue to the audited bodies notifications of such sequestration and lists of relevant accounts and books to be sequestrated.

The same lists of accounts and books to be temporarily sequestrated shall be made in two copies, signed or stamped by audit institutions and the audited bodies with each side keeping one such copy.

Article 17    Where the audited bodies have already ceased their ongoing violations after the audit institutions adopt relevant mandatory administrative measures of audit, the audit institutions shall make timely decisions to release such mandatory measures.

Article 18    Relevant legal documents concerning mandatory administrative measures of audit shall be organized and filed together with other documents and materials of the audit assignments.

Article 19    The authority to interpret these Provisions rests with the CNAO.

Article 20    These Provisions shall come into effect as of January 1, 1997.