China's top auditor has sent a special team to state-owned China Telecom to audit its 2004 income and expenditure.

The audit by the National Audit Office (NAO) began on May 9 at China Telecom's headquarters and six of its provincial branches.

A special office based in Wuhan in charge of the audit convened a teleconference for other members of the country's telecommunications industry on the same day in Beijing informing them of the audit.

The news was publicly announced on the NAO's website on May 11.

The audit team has been authorized to check the telco's financial records, investigate and collect evidence, impose monetary penalties where necessary, and publicize the audit report, according to Huang Daoguo, director of the team.

China Telecom has put together its own "audit" team to cooperate with the NAO team, and all local branches have been ordered to comply with the team's requests, said Wang Xiaochu, board chairman and general manager of China Telecom.

China Telecom has assets worth 540 billion yuan (US$65.3 billion), 21 provincial branches and 70 percent of the country's long-distance telecommunication network.

Central government leaders, especially Premier Wen Jiabao, have urged for an improvement in economic audit processes and procedures, and have vowed to take into consideration audit results when evaluating and promoting or demoting cadres.

In the four years between 2000 and June 2004, audits resulted in the trial and/or punishment of some 3,253 officials, according to the NAO.

From January 1 this year, China expanded the scope of economic audits of government officials to include heads of prefecture-level agencies and other lower-ranking officials.

(Xinhua News Agency May 24, 2005)