Page 54 - China Mobile Limited - Annual Report 2012

China Mobile Limited
Annual Report 2012
48
Corporate Governance Report
The Company and its operating subsidiaries have set up
internal audit departments, which independently audit the
business units of the Company and its operating
subsidiaries. The head of the internal audit department of
the Company directly reports to the Audit Committee which,
in turn, reports to the Board regularly. The internal audit
departments have unrestricted access to all areas of the
Group’s business units, assets, records and personnel in
the course of performing their duties.
The internal audit department of the Company establishes
an internal audit scope and framework and carries out risk
investigations on an annual basis. According to the results of
the risk investigations, the internal audit department
formulates an internal audit project rolling plan and an annual
audit plan and, together with the Audit Committee, reviews
and approves the annual audit plan and resources allocation.
The annual audit plan of the internal audit department covers
various areas, namely financial audit, internal control audit,
risk assessment, audit investigation and consultancy
services. For financial audit, the internal audit department
audits and assesses the truthfulness, accuracy, compliance
and efficiency of the Company’s financial activities and
financial information as well as the management and
utilization of the Company’s capital and assets. For internal
control audit, the internal audit department audits and
assesses the effectiveness in the design and implementation
of the Company’s internal control system. At the same time,
the internal audit department evaluates and assesses the
risk management and control in the Company’s business
processes and management mechanisms, and carries on
special projects and investigations in response to requests
from the Company’s management or the Audit Committee
or if otherwise required. According to the requirements
under section 404 of the SOX Act, the internal audit
department of the Company organizes and performs internal
audit assessment on the internal control over financial
reporting of the Company, providing assurance for the
Company’s management in its issuance of the internal
control assessment report.
In recently years, there were incidents of violations of laws
and discipline by some management personnel of the
Company. In 2012, in order to further strengthen our internal
system and policies for detecting and preventing similar and
other misconduct, we had further reviewed and refined the
relevant systems and processes and defined the anti-
corruption responsibilities of each level of corporate
headquarters, provincial subsidiaries and regional/municipal
branches, and of our business sections including marketing,
networks, planning and construction, procurement, human
resources, finance management. We made a comprehensive
rectification work plan covering procurement, value-added
business, information security, management personnel,
punishment and prevention system to fully implement 21
corrective measures. The centralized procurement scope
had been expanded into the non-equipment items such as
third party maintenance and advertisement, keeping
enhancing our two-tiered procurement centralization. Also,
we further optimized the sharing model of our value-added
business cooperation with newly admitted third parties to
improve the cooperation partners’ introduction mechanism.
Furthermore, we have strengthened our rotation and open
selection policy under which the management personnel will
rotate among different units every two terms. We also set up
a variety of ways for employees and the public to report any
acts of corruption to encourage public supervision.
Internal Audit
The internal audit department of the Company conducts
independent and objective supervision and assessment and
provides consulting services in respect of the
appropriateness, compliance and effectiveness of the
Company’s operational activities and internal controls by
applying systematic and standardized auditing procedures
and methods. The internal audit department also assists the
Company in improving the effectiveness of corporate
governance, risk management and control process, with an
aim to increasing its corporate value, improving its
operations, promoting its sustainable and healthy
development as well as contributing to the achievement of
its strategic objectives.