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China's Auditor-General Li Jinhua urged internal auditing bodies Thursday to conduct more management audits in enterprises to improve their financial and management performance.

The Auditor-General of National Audit Office said on Thursday that income and expenses audits that only aim at correcting errors and cheat could not meet the need of economic development.

Internal audits should play a more important role in improving economic growth and should provide consultation to decision makers, said Li in a council meeting held by China Institute of Internal Audit (CIIA) in Beijing on Thursday.

He said sustainable development has stressed better internal management and the integrated use of resources in a transitional period of economic re

Li encouraged internal auditing bodies to take an active part in supervising and evaluating enterprise's operating activities, risk management and internal control, giving advisory opinions and solutions to decision makers.

The Auditor-General said authenticity and legitimacy are mainly found in China's economic problems. Income and expenses audits are still an effective way to improve financial performance by enforcing authentic and legitimate orientation, he said.

Li said cost-effectiveness audit and management audit are key, and that all audits should not be only a checking system but also a controlling system which could make irreplaceable contributions to enterprises.

The overall objective in 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 audit.

The CIIA was founded in 1987. There are estimated 82,000 internal auditing bodies with more than 200,000 internal auditors in China.

(Xinhua News Agency January 13, 2006)