A PRE-SPECIFIED TESTING PROGRAMME FOR ACCOUNTING ESTIMATES: A THREE-CONDITION DECISION RULE FOR AN ELECTRICITY DISTRIBUTION COMPANY WITH 14 UNITS AND COMMON SHOCKS
DOI:
https://doi.org/10.5281/zenodo.23728936Abstract
The article develops a testing programme and a decision rule for checking accounting estimates (unbilled revenue, the expected-credit-loss allowance) recalculated under the proposed methodology in an electricity distribution company. The 14 units of “Hududiy elektr tarmoqlari” JSC operate in the same months, under the same tariffs and weather, so a Wilcoxon test across units violates the independence assumption. The author proposes to decide on three conditions – across units, quarters and calendar months (critical values 80, 33 and 61). Monte Carlo simulation shows that with a common-shock share of 0.25–0.5 the unit condition alone rejects the null hypothesis in 22.3–39.0% of cases (nominal 5%), while the three conditions together reject at most 4.4%; the minimum detectable effect is 0.40–0.65 standard deviations. Persistent differences between units raise the rejection rate to 7.3%. A four-date test of the provision matrix cannot yield a statistical decision (p ≥ 0.0625), so it is judged against a materiality threshold (1.5 percentage points). The effect on reporting is presented by type of change.Keywords
testing programme, decision rule, Wilcoxon test, common shock, Monte Carlo simulation, accounting estimate, expected credit losses, electricity distributionReferences
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