Killer Errors – Adding when you mean to subtract!
It still surprises me when we are completing a financial model audit, how often we encounter errors where rather than adding a number it is subtracted by mistake (or vice versa). Where you get a sign wrong, it’s especially bad news as it gives you twice the problem compared to missing it out completely. If […]
Killer Errors – Indexation
To help in our mission to save our friends and colleagues from the horrors of modelling errors, we plan to share a series of the most common errors we uncover in our role as model auditors. We hope this helps you dodge a bullet sometime soon. No 1. Indexation Some of the biggest errors we […]
What is a model audit?
What is a Model Audit? In simple terms, a model audit is a review of a financial model, generally completed by an independent third party to help minimise the risk of error. Model audits are typically (but not exclusively) undertaken in relation to financial models which have been developed to support large transactions, where a […]
Disrupting Financial Model Audit
I was speaking to a client the other day and was blown away by his enthusiasm for our new approach to Financial model audit with “model audit 2.0“. To paraphrase, he said ‘I love what you guys are doing. You are disrupting the model audit market. You are like the Tesla of model audit.’ Well, […]
Financial Model Audit: More than a box ticked
I have spent a large chunk of my career as a financial advisor, and that has often involved helping clients to select their model auditor. Often clients see the financial model audit as a necessary evil, a due diligence requirement from lenders, a box to be ticked. The audit is seen as an insurance policy […]
Financial Model Audit: What makes a good audit?
We are constantly striving to make our model audit service as good as it possibly can be. Here’s what we believe makes a great model audit experience: Finding the big errors This goes without saying, but the one thing that overshadows everything else is that you need to be confident that material errors will be […]
Financial Model Audit: Parallel Build vs Cell by Cell
One of the key differences in approach adopted by the various financial model audit firms is whether they follow a parallel build or a cell by cell approach. If you are engaging an auditor to review your model, it is a question you should ask. Cell by Cell This approach is what the name implies. […]
Financial Model Audit: A Clean Audit Report
Having spent more of my career being audited, rather than being the auditor, I always had mixed feelings when I received a clean audit report where they hadn’t found any material issues. On the one hand, relief. The anticipation builds as you approach the bid, and the last thing you need is for the auditor […]
Model Audit 2.0 turns one this week. What have we learned?
Exactly one year ago Gridlines secured its first financial model audit mandate. As we now celebrate the one year anniversary of launching Model Audit 2.0, what have we achieved and what have we learned? Let’s start with the achievements: We have been appointed on over 20 audits with a transaction value in excess of 3Bn […]
Harder, Better, Faster
A Faster Audit? We set ourselves the challenge of looking at the financial model audit process to see how we can make it faster for our clients. For those of you un-familiar with the typical audit process, it usually goes something like this: Engage auditors around 1 month prior to bid / financial close Initial […]