This paper uses the method of double difference to test the influence of government audit on the public funds consumption of state owned enterprises. The empirical results show that in the year of government audit intervention and the following years, the expensization rate and volatility of the consumer cash expenditure of the audited listed companies controlled by the state owned enterprises have decreased significantly, the consumption of public funds has decreased substantially, and the manipulation of the cost of public funds consumption included in inventory has decreased significantly. This confirms the supervision and governance function of government audit on public funds consumption, but the management may still have the manipulation of transferring the consumption cash expenditure into non operating expenditure such as non current assets disposal profit and loss, and the stickiness of consumption cash expenditure has not been significantly reduced after the government audit intervention. It can be seen that the government audit does not completely solve the agency problem related to public funds consumption.