This assesses whether the candidate understands data integrity practices when building models, a daily responsibility for analysts who must produce error-free spreadsheets for management and clients.
Outline a two part answer: first, how you select and rank sources, and second, how you verify inputs after entry. Mention documentation as a habit, not an afterthought.
Start by naming a primary source hierarchy, because that is the backbone of any reliable model. Say plainly that you rank sources by authority and freshness, for example audited financial statements beat a data vendor, and a regulatory filing beats a broker estimate. Then explain that you map every input line in the model to its source, either in a separate tab or as a comment in the cell, so anyone opening your file can trace a number back to its origin without asking you. After entry, describe your verification routine: you do a first pass to input the numbers, then a second pass where you recalculate totals independently, and you always run a balance check, for instance confirming that assets equal liabilities plus equity, or that your revenue growth ties to the historical CAGR. Mention that you flag any figure that does not match your source immediately, rather than letting it sit. Finally, note that you keep a short change log, even if it is just a few lines, so you can explain revisions during a review. That combination of source ranking, traceability, and active cross checking is what separates a defensible model from a hopeful one.
Some candidates answer in abstractions like 'I just double check everything po' without giving a concrete method. Interviewers want specific tools like source mapping, cross checks, and defining a primary source hierarchy.
Situation
During a case competition in my senior year, our team had to build a simple discounted cash flow model for a listed Philippine consumer company. We gathered revenue, cost, and balance sheet data from the company's annual report, two stock research portals, and a news article about a recent acquisition.
Task
I was responsible for compiling the historical financial statements and ensuring every input in the model could be traced to a reliable source despite conflicting figures on one line item.
Action
I first used the audited annual report as the primary source for historical financials because it is the most authoritative public document. For the conflicting line item, which was the cash balance, I checked the notes to financial statements and found the difference was due to a reclassification. I built a source map on a separate tab that listed every model input, its source, and the date accessed. I also added a cross-check formula that compared the sum of segments to the reported total to catch entry errors.
Result
Our team advanced to the final round, and the judges specifically noted the model's clear source documentation as a strength. I later reused the source map template for another academic project.
Accurate modeling starts with a formal source map and cross checks at every level of aggregation.
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