Abstract: The power performed by government auditing institutions can be classified into such powers as power of project application, evidence acquisition, results reporting and settlement and punishment. However, restricted by the present conditions of the internal institution setup of the auditing bodies, the performance of the current multiple auditing powers mainly focuses on the operational departments. Owing to the inefficiency of the decentralized and balanced power system, opportunist behavior is likely to take place. Therefore, the way to set up the internal institutions in the auditing bodies has become one of the key factors affecting the quality of government audit. Hence, it has great practical significance to guarantee the audit quality by establishing a relatively separated and restricted mechanism of auditing power, increasing the audit transparency and supervision over auditing power, and reducing audit conspiracy and screening behavior through institutional reform and innovation.

Key words: functional institutions; decentralized and balanced power; opportunism; audit quality