Abstract: Public power supervision, transparent government and national governance modernization is not only the hot topic of the current social concern, but also the closely attended research subject among the national audit academics. Taking the public power supervision as the starting point, this paper makes use of the data of China’s 31 provinces, autonomous regions and municipalities from 2006 to 2014 to conduct an empirical test of the effect of the state audit on the improvement of national governance ability. The findings show that public power supervision can exert a path effect on the state audit service for the national governance. Through the public power supervision, the state audit can effectively reveal the irregular and illegal acts in the process of the use of public power. Meanwhile, the handling and penalties made by auditing agencies can provide the decision-making sections with relevant and reliable audit information, so as to improve the institutional deficiencies and fill the management loopholes in the national governance system, thereby effectively enhancing the national governance ability. In addition, the path effect of the public power supervision has regional differences; compared with the central and western regions, the state audit in the eastern region has a stronger effect on the improvement of national governance ability. Further study shows that the institutional environment can ensure the implementation of the work of the state audit, which can help the state audit further enhance the national governance capacity.

Key words: state audit; national governance; supervision of public power; institutional environment