INTERNAL AUDIT by yurtgc548


									2007 Annual Report

                                             INTERNAL AUDIT

     In 2007, the Internal Auditing Department of the             level branches.
  PBC further deepened performance audit on officials,
  tightened audit regulation on major business and key                                   First, a special audit was con-
  risk areas, continued to promote the establishment of           ducted on management of infrastructure construction,
  internal control mechanism of the PBC, improved basic           under which 69 infrastructure projects approved by the
  work of internal audit, and achieved favourable effects.        PBC Head Office between 2001 and 2004 were audited.
  4 570 audit programs were conducted; 5 024 audit                The audit enhanced the PBC branches at all levels to
  reports were made while 2 736 pieces of conclusions             further improve internal control and strengthen
  and solutions were drawn and 26 773 pieces of reme-             financial management of infrastructure projects.
  dial suggestions were provided by the PBC. The role of          Second, a special audit on bank accounts management
  internal audit was strengthened in standardizing                of the PBC was conducted on 104 branches and sub-
  management and preventing risks.                                branches including 2 operations offices, 15 provincial
                                                                  branches, 2 municipality (directly under central gov-
        In 2007, the PBC executed performance audit on            ernmen) branches, 85 city prefecture-level branches,
  presidents of Chongqing Operations Office, Kunming,             which promoted branches at all levels to enhance bank
  Lanzhou and Dalian sub-branches. Branches and sub-              accounts standardized management and safeguarded
  branches also conducted such performance audit on               the security of financial assets by preventing irregular
  1 439 people including presidents of lower-level bran-          activities from the origin. Third, a special audit was
  ches and heads of other functional departments in the           conducted on banknotes processing centers in Shanghai
  same branch. The performance audit was gradually                Head Office, Jinan branch and 25 sub-branches, which
  standardized in contents, priorities, methods and               facilitated these banknotes processing centers to
  procedures, and was improved by study in assessment,            further strengthen internal control building, business
  which was transformed from quality assessment to a              operation standardization, and management on equip-
  combined assessment on both quality and quantity.               ments and finance. Fourth, earmark audit and inves-
  Meanwhile, departure audit was also conducted on                tigation was conducted on administration in line with
  presidents of Shenyang branch, Yinchuan, Urumqi,                the law. Audit and investigation was executed in Nan-
  Hefei sub-branches and Xi'an Operations Office,                 jing and Chengdu branches and 32 sub-branches, which
  deputy president of Jinan branch,        heads of the           were urged to improve organizational structure and
  Supervisory Center of Anti-money laundering, and                operating mechanism of administration in line with the
  Dalian Training Center    as well as heads of Chang-            law, as well as the procedure and content. Such audit
  cheng Coin Co. Ltd. (Hong Kong). Branches at all                safeguarded the image and confidence of the PBC.
  levels conducted departure audit on 627 managerial              Fifth, special audits were also conducted on mana-
  staff. Such audit further strengthened legal and                gement of computer rooms in 6 branches and opera-
  accountability consciousness of managerial staff, pro-          tions offices and 5 provincial branches. Branches at all
  moted internal management of the branches under audit,          levels were urged to enhance security management of
  and consolidated and improved the periodically circu-           computer rooms, its operating system and network, as
  lating audit system by upper-level branches to lower-           well as the maintenance. Six, special audit was also

executed at database operation management in Shang-             training courses were held to train a total of 6 565
hai Head Office, 5 branches and operations offices, 5           person to improve personnel technique and quality.
provincial branches and 7 city prefectural branches,            Second, efforts were made to optimize the management
which facilitate these branches to further strengthen           of audit personnel database, to revise the admi-
database management and ensure the security of the              nistrative rules on audit personnel database, to fasten
PBC's information system.                                       its utilization and updating frequency, and to clarify the
                                                       -        selection criteria and transfer requirement of auditing
                                            -                   personnel, so as to make the auditing personnel
The PBC continued to push forward internal control              database better serve the audit work. Third, IT
mechanism construction. In each audit execution, the            construction of internal audit was enhanced by
soundness and efficiency of internal control was                accomplishing the development of main procedures of
attached great importance, and the branches under               the comprehensive administrative system of internal
audit were urged to enhance internal management and             audit business, compiling electronic handbook for
further improve relevant internal control mechanism             internal audit, and developing subsidiary audit
and system. The Procedures of the People's Bank of              software for centralized accounting system of the
China on Regulation and Assessment of Internal                  central bank. Fourth, international communication was
Control was formulated to further standardize audit             intensified for internal audit. Representatives attended
and assessment of internal control mechanism, which             the Fifth Asia-Pacific Central Bank Internal Audit
explicitly defined content, criteria and procedures of          Department Summit. Selected staff also attended
internal control regulation and assessment, and                 international seminars and training courses organized
provided detailed guidance of operations for internal           by the IMF, the Federal Reserve of New York, the BIS,
control assessment of the PBC.                                  and the Bank of England etc. to learn advanced theory
                                                                of internal audit, and exchange experience in central
                First, efforts were made in training for        bank internal audit, which came out with good results.
audit officials. Various audit seminars and pre-audit


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