The auditing of financial models is required for the purpose of mitigating risk associated with many types of models, especially those used for financing, valuation and investment. However, even models that aren’t subject to audit requirements can benefit from an audit and subsequent modifications. If the output of your financial model has a significant impact on financial decisions, your model should periodically be audited for accuracy; sensitivity; consistency with contracts, tax laws and regulations; and for logic used within the model.
Investing in improvement
Whether your model is a hand-me-down from a predecessor or a creation of your own ingenuity, an audit could lead to revisions that would benefit your organization. These revisions may include streamlined data input and advanced formula techniques or more automated means of data import. Excel experts use many techniques to protect against the introduction of error and improve efficiency. Revisions that can reduce error while saving you time and money can make the cost well worth the investment.
How does your current model work?
Here are some questions to ask about your Financial Model:
– Is data pasted into the model from other sources?
– Are there REF errors in the model?
– Do formulas reference data in other files?
– Are input cells scattered throughout the workbook in different worksheets?
– Are the results in a user-friendly dashboard format, which is easy to print and share?
– Is it difficult to navigate the workbook?
– Are the worksheets cluttered with information and input cells?
If the answer to any of these questions is yes, then consider an audit and improvements by someone familiar with the latest techniques in Financial Modeling with Excel.