As a strong part of government monitoring measures, the role of government auditing and its effectiveness is an important research topic. This paper uses the difference-in-difference model to study the external governance effect of government auditing from a perspective of stock price crash risk based on the setting of audits of CSOEs by the National Audit Office of China (CNAO) from 2009 to 2015. It shows that after the implementation of government auditing, the CSOEs' stock price crash risk reduces significantly, and this finding is robust to a series of robustness tests. Further study indicates government auditing promotes CSOEs' more timely disclosure of bad news, thus reducing their stock price crash risk. In addition, more frequent government auditing leads to stronger role in the alleviation of stock price crash risk and there is the spillover effect of government auditing, namely stock price crash risk of CSOEs that are not audited also reduces after the occurrence of audit events. It is of great theoretical and practical significance to the evaluation and perfection of government monitoring in China.