02 Aug 2004
In August of 2003 China Telecom Corporation Limited began a China Telecom and internal control project relevant finance report to comply with the new supervision requirements of for overseas companies listed in USA. The aim of the requirements is to regulate internal management of a company and to emphasize reliability of finance report of the company.
Under the efforts of all levels of China Telecom (including senior executives, projects teams and consultants), an Internal Control Handbook, a compendium document on internal control, was completed in the end of July this year. Meanwhile according to the program and approaches the compile works of detailed rules on internal control has been spread in its provincial subsidiaries step by step. All the work above established a solid foundation for trying out internal control management in its provincial and municipal subsidiaries next time.
In the view of China Telecom, to strengthen a company's ICS needs everybody's participation, i.e., from the Board, management members, to ordinary employees. And the management members at all levels of the company will take primary responsibility in this program. The key point of the program is to quicken establishment of internal control evaluation & supervision system. China Telecom will introduce the model of COSO control to frame its internal control evaluation system.
Right now China Telecom has been implemented systematically training about internal control to all subsidiaries and branches and has defined the responsibilities and authorities for intensifying internal control to each department. It also has cleared the principles and methods to establish the evaluation system and has completed the frame, division and organization guarantee of ICS.
According to the program of the ICS Project, twenty subsidiary companies of China Telecom are expected to complete compiling work of detailed rules by the end of 2004, and theICS on trail will be carried out before quarter 2 of 2005.
The project teams at all levels of China Telecom have firm confidence to reach and exceed the target of the project in the schedule. China Telecom will establish a high-level ICS relevant finance report finally.