Module VI· Model Auditing & DebuggingIntermediate
Question
How do you diagnose a growing balance-sheet imbalance caused by a forecast bug?
Answer
A growing imbalance usually means a flow is missing or has the wrong sign each period. Check net income to retained earnings, D&A to PP&E, capex to PP&E and CFI, debt repayment to debt balance, working-capital changes, and FX / OCI. Identify the first year the imbalance starts, then audit formulas feeding that year.