**Exhibit 99.1**

 

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

 

To the Board of Directors of 

AsiaInfoHoldings, Inc. 

4th Floor, Zhongdian Information Tower 

6Zhonggnancun South Street, Haidian District 

Beijing 100086, China 

 

We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, that AsiaInfoHoldings, Inc. and subsidiaries (the “Company”) did not maintain effective internal control over financial reporting as of December 31, 2004, because of the effect of the material weakness in relation to the lack of qualified expertise inaccounting for income taxes under accounting principles generally accepted in the United States of America identified in management’s assessment based on the criteria established in Internal Control—Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission. As described in Management’s Annual Report on Internal Control Over Financial Reporting, management excluded from their assessment the internal control over financial reportingat Lenovo’s non-telecommunications-related IT services business, which was acquired in October 2004 and whose financial statements reflect total net assets and gross revenues constituting 4% and 9%, respectively, of the related consolidatedfinancial statement amounts as of and for the year ended December 31, 2004. Accordingly, our audit did not include the internal control over financial reporting at Lenovo’s non-telecommunication-related IT services business. The Company’smanagement is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’sassessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit. 

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and performthe audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting,evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides areasonable basis for our opinions. 

 

A company’s internal control overfinancial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors,management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Acompany’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assetsof the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the companyare being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’sassets that could have a material effect on the financial statements and financial statement schedule. 

 

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud maynot be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because ofchanges in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 

 

 

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than aremote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The following material weakness has been identified and included in management’s assessment: The Company’smanagement lacks sufficient experience and expertise with regards to accounting for income taxes under accounting principles generally accepted in the United States of America. This material weakness was considered in determining the nature, timing,and extent of audit tests applied in our audit of the Company’s consolidated financial statements as of and for the year ended December 31, 2004, of the Company and this report does not affect our report on such financial statements.

 

In our opinion, management’s assessment that the Company did not maintaineffective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of SponsoringOrganizations of the Treadway Commission. Also in our opinion, because of the effect of the material weakness described above on the achievement of the objectives of the control criteria, the Company has not maintained effective internal controlover financial reporting as of December 31, 2004, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 

 

We have also audited, in accordance with the standards of the Public Company AccountingOversight Board (United States), the Company’s consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2004 and our report dated March 15, 2005 expressed an unqualified opinion on thosefinancial statements and related financial statement schedule. 

 

/s/  Deloitte Touche Tohmatsu 

 

Hong Kong 

March 15, 2005