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Financial Model Audit – Cell by Cell vs Shadow Modelling

Imagine a ‘Where’s Wally’ (or Waldo in the USA) picture, but rather than a few hundred people, you have many thousands.

To make things worse, the variability of each individual person can be huge, and you don’t know what Wally is wearing!

To make things worse again, there may be many Wallys, or none at all.

To make things even worse, imagine you have to find all of the Wallys under time pressure, with potentially millions of dollars riding on the outcome.

This characterises the cell-by-cell approach to financial model audit.

It can be achieved, but is time consuming and not without risk that a Wally could slip through undetected.

At Gridlines, we adopt the “Shadow Modelling” approach to financial model audit.

This approach is a more holistic and gives confidence in the accuracy of the overall output of a financial model.

In this approach, we develop a ‘Shadow Model’ which replicates required functionality of the model under test and then reconciles the results.

This is the equivalent of overlaying two images, one with and one without the Wallys. In this case, each Wally will stand out like a sore thumb.

All financial model audits are not the same.

We provide competitive pricing to our clients and deliver a service tailored to the situation they are in and the model assurance they require.

If you are looking for a model auditor who sweats the small stuff as if it were our own project on the line, then you should get in touch with our team today.

Tell us about your project today.

Danny Leitch


Danny Leitch

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