Does the Full Coverage of State-owned Enterprise Audits Promote the Preservation and Appreciation of State-owned Assets? On the Regulating Effect of the Transformation of State-owned Enterprises’ Supervision Functions in the State-owned Assets Supervision and Administration Commission

As the backbone and cornerstone of the national economy, state-owned enterprises have the primary responsibility of maintaining and increasing the value of state-owned assets. The 18th National Congress of the Communist Party of China opened a new round of state-owned enterprise reforms in China. The reform of the external supervision system of new state-owned enterprises clarifies that the National Audit Office have fully covered the auditing supervision of state-owned assets, and the State-owned Assets Supervision and Administration Commission （SASAC） has promoted the transformation of the supervision function of state-owned enterprises through the management of capital. How to realize the preservation and appreciation of state-owned assets is a new task and challenge faced by the National Audit Office and the SASAC. Based on the announcement of the audit results of the central government’s financial revenue and the expenditure announced by the National Audit Office in 2013-2018, starting with the breadth and depth of national audit coverage, and selecting 2012-2017 Commercial Central Enterprise Holding Listed Companies as samples, this paper empirically examines the relationship between the full coverage of state-owned enterprise audits and the preservation and appreciation of state-owned assets, and the regulating effect of the state-owned assets supervision and management function change of the SASAC on the relationship between the two. The study finds that: First, the coverage expansion of the auditing supervision objects of state-owned enterprises can effectively promote the preservation and appreciation of state-owned assets, and the deep increase is not conducive to the preservation and appreciation of state-owned assets. Second, the transformation of the SASAC’s function of managing capital has significantly enhanced the positive correlation between the coverage of the auditing supervision objects of state-owned enterprises and the preservation and appreciation of state-owned assets, but it does not affect the annual coverage of the auditing supervision content of state-owned enterprises and the preservation and appreciation of state-owned assets. The above conclusions are still established after the robustness test and the endogeneity test. Therefore, the National Audit Office should actively use the good opportunities created by the reform of the state-owned enterprise supervision system, expand the coverage of the auditing and supervision objects of state-owned enterprises, select the types of the auditing supervision contents of state-owned enterprises in a focused manner according to the annual work priorities of the party and the state, and design a more reasonable and effective state-owned enterprise audit coverage plan to promote the preservation and appreciation of state-owned assets. At the same time, the National Audit Office and the SASAC should also clarify their respective state-owned enterprises’ supervisory duties and responsibilities, give full play to the synergy between the two, and jointly promote state-owned enterprises to deepen reforms and realize the preservation and appreciation of state-owned assets.