The audit of government financial reports is a crucial component of audit oversight, playing a vital role in improving the audit supervision system, ensuring the quality of government financial reports and promoting the disclosure of government financial information. In China, research on government financial statement audit has progressed relatively slowly, with limited consensus formed to adequately support institutional development and practical implementation. By reviewing domestic and international studies on the construction of government financial statement audit systems, institutional demands, operational mechanisms, and factors influencing audit quality, this study reveals that while audit systems across countries share commonalities, they also exhibit distinct characteristics shaped by local contexts. Institutional improvements are incremental. Institutional reforms, driven by national imperatives grounded in the objectives of good governance, have been empirically demonstrated to enhance the quality of government financial reporting and decision-making efficiency, thereby fostering sound governance. Audit quality is influenced by the characteristics of audit entities and the governance mechanisms of audited units, with government regulation serving as the core safeguard for audit quality. Based on these findings, the study identifies potential research opportunities and offers policy recommendations to inform the development of China's government financial statement audit system and advance related academic inquiries.