6.3 Auditing & Error-Proofing Models

The 5-Point Model Check

1. Structural Validation

   • CTRL+[ to trace precedents

   • Circular reference warnings

2. Input Sanity Checks

   excel

   =IF(Revenue/GrossProfit>10, "ERROR: Impossible Margin", "")  

2. Version Comparison

   • Spreadsheet Compare (Microsoft Office)

   • =SUMXMY() for model diffs

3. Stress Testing

   • Data Validation dropdown: "Worst Case Scenario"

4. Documentation Standards

   • Red/Yellow/Green cell coding:

     • Red = Hardcoded input

     • Yellow = Calculation

     • Green = Output

Wall Street Example:

• Goldman Sachs' model certification checklist