Anomalies in the financial reports of a power company : Part 1
Date : 8 January 2026
## 1. Revenue and profit trends versus cost environment
- Company ’s core operating revenues show only modest growth over 2022–2024, while gross profit and operating profit do not decrease in line with the sharp increase and subsequent volatility in fuel and power purchase costs during the same period.
- This pattern suggests that profit figures may appear “smoother” than would be expected given the external cost pressures, raising concerns about possible use of classification, timing, or presentation of income and expenses to stabilise reported earnings.
**Audit concerns**
- Whether revenue recognition and expense classification policies have been applied consistently, or selectively adjusted to maintain stable profit margins.
- Whether there are any year‑end manual adjustments or reclassifications (e.g. moving items to “other income”) that significantly affect operating profit.
***
## 2. Property, plant and equipment and construction in progress
- The carrying amounts of property, plant and equipment (PPE) and construction in progress (CIP) increase significantly over 2022–2024, reflecting large capital expenditures in network and system projects.
- However, depreciation expense does not rise proportionately with the growth in PPE balances, especially in 2023–2024, which may indicate extensions of useful lives, changes in residual values, or delayed capitalisation/commissioning decisions that reduce current‑period expenses.
**Audit concerns**
- Whether useful lives, residual values and depreciation methods have been revised in a manner that is adequately supported and disclosed, or primarily to reduce depreciation expense.
- Whether CIP projects are tested for impairment or re‑assessed for capitalisation criteria when there are delays, scope changes, or lower‑than‑expected economic benefits.
To be continued—————————————————————————————————————————————
#FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1
Date : 8 January 2026
## 1. Revenue and profit trends versus cost environment
- Company ’s core operating revenues show only modest growth over 2022–2024, while gross profit and operating profit do not decrease in line with the sharp increase and subsequent volatility in fuel and power purchase costs during the same period.
- This pattern suggests that profit figures may appear “smoother” than would be expected given the external cost pressures, raising concerns about possible use of classification, timing, or presentation of income and expenses to stabilise reported earnings.
**Audit concerns**
- Whether revenue recognition and expense classification policies have been applied consistently, or selectively adjusted to maintain stable profit margins.
- Whether there are any year‑end manual adjustments or reclassifications (e.g. moving items to “other income”) that significantly affect operating profit.
***
## 2. Property, plant and equipment and construction in progress
- The carrying amounts of property, plant and equipment (PPE) and construction in progress (CIP) increase significantly over 2022–2024, reflecting large capital expenditures in network and system projects.
- However, depreciation expense does not rise proportionately with the growth in PPE balances, especially in 2023–2024, which may indicate extensions of useful lives, changes in residual values, or delayed capitalisation/commissioning decisions that reduce current‑period expenses.
**Audit concerns**
- Whether useful lives, residual values and depreciation methods have been revised in a manner that is adequately supported and disclosed, or primarily to reduce depreciation expense.
- Whether CIP projects are tested for impairment or re‑assessed for capitalisation criteria when there are delays, scope changes, or lower‑than‑expected economic benefits.
To be continued—————————————————————————————————————————————
#FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1
Anomalies in the financial reports of a power company : Part 1
Date : 8 January 2026
## 1. Revenue and profit trends versus cost environment
- Company ’s core operating revenues show only modest growth over 2022–2024, while gross profit and operating profit do not decrease in line with the sharp increase and subsequent volatility in fuel and power purchase costs during the same period.
- This pattern suggests that profit figures may appear “smoother” than would be expected given the external cost pressures, raising concerns about possible use of classification, timing, or presentation of income and expenses to stabilise reported earnings.
**Audit concerns**
- Whether revenue recognition and expense classification policies have been applied consistently, or selectively adjusted to maintain stable profit margins.
- Whether there are any year‑end manual adjustments or reclassifications (e.g. moving items to “other income”) that significantly affect operating profit.
***
## 2. Property, plant and equipment and construction in progress
- The carrying amounts of property, plant and equipment (PPE) and construction in progress (CIP) increase significantly over 2022–2024, reflecting large capital expenditures in network and system projects.
- However, depreciation expense does not rise proportionately with the growth in PPE balances, especially in 2023–2024, which may indicate extensions of useful lives, changes in residual values, or delayed capitalisation/commissioning decisions that reduce current‑period expenses.
**Audit concerns**
- Whether useful lives, residual values and depreciation methods have been revised in a manner that is adequately supported and disclosed, or primarily to reduce depreciation expense.
- Whether CIP projects are tested for impairment or re‑assessed for capitalisation criteria when there are delays, scope changes, or lower‑than‑expected economic benefits.
To be continued—————————————————————————————————————————————
#FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1
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