Generally I am a proponent of graphs and tables. I think that when presenting data in due diligence or collateral examination reports, graphs and tables present it in a pure and unbiased state.
Pure data is the best way to underscore a point or opinion. For example, if after performing test counts an examiner determines that there is a need for a reserve due to large negative variances, a table that shows this will only help support this position. A table that is formatted and presented efficiently will help the reader understand the issue quickly and easily. Continue reading
This post is one that I would like to avoid writing, as I am going to admit committing one of the cardinal sins in due diligence/collateral auditing and being a service provider in general. Not only have I committed it, but I have committed it twice in the last month! Hopefully by admitting it here, I can help someone else avoid the same misstep. The issue I am going to be discussing is timely communication of audit findings (or the lack thereof).
Before I go on, let me assure any current or prospective clients that the instances mentioned below are exceptions and not the rule. Throughout my career I have practiced what is preached; however, I am human and sometimes I just mess up. Of course I have reasons for the transgressions discussed; however, those reasons do not excuse the fact that they occurred. I take full responsibility for them and I will not bother to try and justify them by discussing the reasons involved. Continue reading
Examiners love numbers. We like to work with them, write about them and interpret them. We use numbers to describe pools of collateral and/or the results of our analysis of those pools. Some of our favorite numbers are averages, variances and other statistical metrics.
Often we gain great comfort in the results of testing as well as make bold proclamations about those results due to an average result or “net variance.” Unfortunately, our reliance on these comforting metrics is often misguided and worse, can lead to misinformation in our reports. Continue reading