Abstract:Using China’s local state-owned A-share listed companies from 2005 to 2019 as the research sample, this paper empirically explores the effect of government audit on corporate tax avoidance from prefecture level. The results show a significant negative correlation between government audit efforts and the degree of corporate tax avoidance. And further, this association mainly exists in places with weak tax enforcement and in firms with higher agency costs or lower information transparency. The results indicate that government audit can effectively reduce corporate tax avoidance, and its role is more significant when other governance mechanisms that curbing tax avoidance are weak. In other words, government audit can complement other mechanisms, and it is an active re-supervising mechanism. This research has both theoretical and practical implications for how to make better use of government audit as an “immune system” in enhancing national fiscal and economic safety.