Background Auditing of surgical outcome is controversial due to lack of standard auditing system. POSSUM (Physiological and Operative Severity Score for the enUmeration of Morbidity and mortality)system provides a risk adjusted auditing in surgical practice, which is a reliable scoring system. However it has not been generalized in China, especially in gastric surgery. Present study evaluates the application of POSSUM system to compare surgical outcome of malignant gastric disease between specialized unit and general unit. Methods Retrospective study was performed on 394 patients who underwent surgical intervention for gastric cancer and malignant gastric lymphoma. POSSUM data were collected according to standard criteria described by its original authors. Exponential analysis method was used for data analysis. Observed to Expected morbidity (O:E) ratio was calculated for each unit to give risk adjusted comparison. All the complications were categorized into minor to severe to give an objective view of complications. Results There was significant difference in surgical outcome between specialized unit and general unit. POSSUM predicted morbidity well and O: E ratio of specialized unit was better than general unit. Further more postop stay wassignificantly shorter(P ＜0.001 ) in specialized unit and number of moderate and severe morbidity was significantly lower (P＜0.001) than general unit. Conclusions Surgical outcome of specialized unit was better than general unit. POSSUM can be used for risk adjusted auditing of postop complications in malignant gastric disease, which provides a reliable audit. However morbidity definition in POSSUM should be amended and modification in POSSUM formula may be necessary to fit major surgical interventions like gastric cancer surgery.