Peter Weatherston – Financial model audits at Corality

Fimodo chats to Peter Weatherston, Financial model audits at Corality.

What do you do?

I work as an associate for Corality, managing the audits of financial models form large PPP and project finance transactions to investment bank performance monitoring tools.  We have a real focus on best practice so I’ve been involved in several best practice reviews now, making recommendations on modelling techniques for reducing potential errors and model risk.

Why did you start to work in financial modelling?

I trained as an auditor in London and then moved into management consulting within the same firm largely because I didn’t know what to do next.  After some project management assignments, a position came up for me to work as financial modeller for a large UK government project and one crash-course in advanced modelling later I had built a financial model which was immediately under intense scrutiny from a programme board and I was THE financial decision support for the project.  I’ve worked within financial modelling ever since with a focus on PPPs and UK PFI’s.

What was your first job?

My first proper job after University and travelling was as a trainee auditor for one of the large accountancy firms.  My experience was really varied and I worked on a mixture of public and private sector clients on external and internal audit assignments.  I worked on a whole range of client types from UK listed companies, owner-managed businesses, government agencies and charities so the cultural differences between clients were huge at times and I really learned a lot from it.

What did you study and how does it help you in financial modelling?

I studied Accounting and Business Law at University and then qualified as a CIPFA accountant.  The public sector slant on my studies has been invaluable for PPP assignments as I have a much better understanding of public sector values which helps when I’m working for private sector clients trying to win government contracts.  My 3 years training as an auditor has moulded me into taking a very structured and disciplined approach to my work and taught me the importance of focusing on key risk areas.

Describe a typical day?

Very cliche but there’s really no such thing as a typical day for me.  Last week, for example, we were working on a PPP bid for a large Australian bank and with the bid date being Wednesday, I have to say that I worked some strange (and long) hours trying to respond quickly to each further iteration in what was a fairly fluid model.  In contrast, today and most of this week, I am working on a power station refinancing deal and I have spent a lot of time trying to make sense of the documents.  Which are in German!  Since the client is in Germany and so probably fast asleep as we work, there is less immediate time pressure so I’m enjoying the period of relative calm.  Since I joined in July, the increased workload has meant we’ve had to take on a lot of new staff.  The added challenge for me now is managing my own workload at the same time as organising the rest of the team and being available to support the new guys and help with the appropriate training.

What is on your agenda for 2010?

For Corality, in the pipeline, we have a lot of Australian PPP models audits and some European and Australasian project finance transactions which should be pretty interesting.  The time pressures on some of these transactions can be demanding but at the same time give me the most satisfaction on completion.  For me personally, I’m still pretty new to Sydney and I’m looking forward to the summer and improving my surfing.  I have to admit I’m still rubbish but I’m pretty hopeful that this weekend’s lesson will be the turning point for me!

What is your favourite financial modelling trick? Why?

This question took me the longest to answer.  In terms of financial model auditing, I’d say my favourite trick is the use of the BPM Traverse tool.  Its free to download from their website and makes reviewing complicated formulae much easier, and saves a lot of time.  As I suspect this is not what you meant by the question, I’d say my favourite proper trick is the use of F11 to create a quick chart.  I use this all the time in auditing, for example to check for any unusual cashflows.  To use it, you have to simply select the series of items you want to compare (revenue v cost?) and by pressing F11, the values are charted in a new sheet.  Very simple and effective.

How are financial models used in your organization?

Financial models are pretty much what we do.  By and large, we audit financial models so we see a lot of good ones and at the same time, a lot of bad ones!  One thing that impresses me with Corality is that when we think it’s worthwhile, we build shadow models to give our best practice reviews more gravity.  Clients get a lot from seeing how their models could have looked and it really helps us in identifying errors.

Do you have any hidden talents?

I found out just the other day that when a cockroach jumps into my hand I can scream like a big girl.

Links

Corality: www.corality.com

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