Validation And Reconciliation

Question 0

Methods of validation and reconciliation ?

Answer 0

Gain and loss analysis (source of deviations) ;
Static (start point or end point) / dynamic (on-going in a period) model validation ;
Cross checking against other data;
Triangulation.

Question 1

Difference of validation and reconciliation ?

Answer 1

Validate: recognize, establish or illustrate worthiness or legitimacy;
Reconcile: make consistent or congruous with reality

Question 2

What is wrong if validation or reconciliation is not passed?

Answer 2

Choice of model points;
Model methodology;
Inappropriate assumptions ;
Errors in data;
Part instead of the whole portfolio.