We are sponsors of the 2015 publication of the ICAEW’s Twenty Principles of Good Spreadsheet Practice (“the Principles”). At the launch event the benefits of using the Principles in practice was highlighted. For our part we have begun to use the framework offered by the Principles as a template against which we can advise our clients (our “Health Check”) and we have prepared a brief case study which demonstrates the power of the Principles in practice. Continue reading
According to Wikipedia: “Risk identification and allocation is a key component of project finance.” When it comes to financial models, some of that risk is allocated to model auditors. Taken in isolation, is the size of liability cap offered or size of firm more important when considering which model audit firm is best placed to take this risk on? Continue reading
Our friends at F1F9 commissioned YouGov to complete a survey about how spreadsheets are used in UK businesses. The results support the view that under investment in spreadsheet development in the areas of training, control and review leads to financial loss and poor decision making.
The key results reported from a model audit point of view are..
Our team are heavily involved in the renewable energy market in Africa and on the back of this experience, David Donnelly, who heads our renewable energy team has contributed a thought piece to Clean Energy Pipeline’s most recent expert guide. We are big fans of these guides and this is recommended reading for anyone interested in the rapidly growing opportunities in clean energy projects in Africa. Continue reading
Another spreadsheet horror story appeared recently in the the Wall Street Journal. This relates to a $100m spreadsheet “mix up”. It is interesting that this has come to light in the world of M&A where the use of model auditors is not well established, but this seems to be changing. Continue reading
The other day I was asked by a team member to undertake a review of late changes to a swap schedule in a client model prior to an imminent financial close. This is a high risk area and time was short, but that was OK by me. Why? Continue reading
We read with great interest Danny Leitch’s posting on the F1F9 blog. He observes that we have all “been looking at around 1,000 versions of pretty much the same model” and that there must be more benefit to sharing. We agree but, believe sharing has already been the driver of improvement of spreadsheet practice and that the adoption of shared standards is the key to a step-change in practice in the future. Continue reading
At Mazars we have built our reputation in model audit by placing emphasis on a “shadow modelling” approach. This differs from the traditional reliance on inspection techniques and this post summarises our take on this debate.
A quick google of the phrase “model audit”’ allowed me to come up with the following brief definition: Continue reading
After the World Cup final, expect a plethora of articles about how we should all do things the German way. In the last of this series of three posts on the launch of the ICAEW’s 20 principles for good spreadsheet practice, we discuss how best to implement the principles in your organisation and work in a tenuous world cup link… Continue reading
Much of our work as model auditors is to provide assurance on financial models which are being used by private sector clients to bid for public sector contracts. Frequently, there is a requirement under such contracts for the bidder to obtain independent certification that their model(s) are compliant with “best practice”. This is problematic as there is no industry definition of what “best practice” actually means. We believe the ICAEW’s recently published 20 principles of good spreadsheet practice provide a way forward which can help improve the standards of models used for procurement purposes. Continue reading
The Institute of Chartered Accountants for England and Wales has recently launched a major piece of thought leadership; its 20 principles for good spreadsheet practice. Rather than just being another interesting document we believe these principles can be an important milestone in improving spreadsheet good practice across industry. Why? Continue reading
A recent article summarising a dispute in relation to an apparent $80 million spreadsheet related error in a bid for a Chilean toll road, raises interesting questions as to the standards we should expect both in terms of financial model accuracy and the competence of those tasked with creating them. Continue reading
I read with interest the ongoing debate between Chris Giles, Financial Times columnist, and Professor Thomas Piketty “Data problems with Capital in the 21st Century”. Giles claims to have “found data problems and errors” which undermine Piketty’s “conclusion that wealth inequality is rising in the US and in Europe”. Piketty has since responded robustly.
I can’t comment on any economic arguments but I did have a quick look at the underlying spreadsheets that are the source of the some of the controversy (they are fairly basic) and I thought it would be useful to see whether good spreadsheet practice would have helped the professor. Continue reading
I was delighted to hear that F1F9 was publishing “The Dirty Dozen” as part of a stimulating eBook series – and they invited me to write a foreword to this edition. Here, at last, in accessible form are real-world examples that demonstrate the real risks inherent in poor financial modelling methodology and quality control. Continue reading
We receive many requests for proposals (RfPs) to provide model audits and they do vary enormously in the amount of detail included. We thought it would be helpful to give our view of what it is helpful for us to know to give you the most informed quote – and also some things to think about to ensure you obtain the right information from us or our competitors, these are summarised below. We’ve also put together an editable template RfP which is available on request. Continue reading