Abstract: The neo-institutional economics always emphasizes the decisive influence of the system on contract structure and focuses the effects of institutional environment on the system’s operating efficiency. Its organizational theory has provided theoretical basis for the existence of an interactive relation between the state audit organization and the audit environment. As one of the superstructures, the state audit organizational system should fit in the audit environment; the audit system as the core of the audit organization system should be dynamically reformed. According to the general law of institutional evolution during the course of institutional substitution, transformation and transaction, we should choose the system mode of audit system innovation, auditing system marginal improvement, and resource allocation mechanism transformation at the right time.

Key words: institutional environment; institutional changes; state audit; audit system