Village governance is fundamental among “Three Rural Issues” (agriculture,rural areas and farmers) in China. However,because of the property defects and complicated social environment, internal governance of the village economy may fail. Therefore, it is of necessity to cooperate with the help of external governance. External governance includes the checks and balances mechanism and supervision mechanism, financial agency system for village and the accountant accreditation system are checks and balances mechanism, and external audit is a basic external supervision mechanism, each external mechanism has its advantages and disadvantages, therefore, they need to cooperate with each other, but anyway, checks and balances is fundamental. The entity of audit village include government audit and nongovernmental audit, and government audit cost is lower, its effect is better. The objects of village audit include village and its financial agency. The audit subject for village audit include financial information and non-financial information, behavior and institutions, the kind of engagement for village audit include financial audit, compliance audit, performance audit, internal control audit and comprehensive economic responsibility audit. In order to improve the village economic governance system, it is of necessity to build town-level government audit to carry out village audit, which should be authorized from the perspective of legislation.