Model auditing is an important and necessary step when building or modifying a

financial model. While the original model builder can check their work, we recommend

a peer review in which another person on the team audits the financial model. This is

critically important since financial models are used for important and often large

financial decisions.

Which statement below most accurately reflects our view on auditing or reviewing a

financial model?

Every individual cell in a financial model should be checked in detail to ensure model

integrity.

Certain select rows of the financial model should be checked in detail and then a

test for column differences can be performed.

Generally, only the first column of a financial model needs to be checked in detail,

as one can test for row differences.

It is most appropriate to randomly spot$-$check only certain cells in detail in a

financial model.