to value certain swap contracts. Other Auditing Tools There are many other techniques used to assess and monitor the ongoing quality of the pricing. Examples include: II Stale pricing exception reports, whereby we can look at any position where the price has not changed over a defined period of time (especially when the general market did move), create other items for attention, and follow up. II Cross-portfolio pricing comparisons are possible when different accounting agents (or custodians), with processes independent of each other, are used to administer portfolios with similar holdings. II Periodic reviews of the portfolio valuations by the portfolio manager, although not an independent party, can be a useful addition to the set of independent controls mentioned earlier. After all, the portfolio manager who follows his securities on a daily basis is often the most knowledgeable party to bring warnings about potentially inaccurate pricing levels to the attention of the valuation oversight area. As employing all these tools can lead to quite an extensive workload, it might be practical to perform them not all on a daily basis, but rather on a periodic and/or sample basis (e.g., once per month). Automation is useful to achieve scalability, and ,4.1... i...... jj.n.i^r.^,-: Open Swap 3 GS Plwih? Buufc 2} <&Lt*Mi24M. 3 ^.r.toaCaiaiUK,:. Ii --"-■ "*. - #£ Mraiu ta.-.d.lil;..Sa.a:i .i:-,TlF.i.": Stls! Also '.-li.Vl.-f.l'F ..■iiila.li TST3 |;jii=ii3 ismi Issup {ill iand!_LHipun b U I 3 indP' (TT Indtis^ja^nifl0 [ii 1lf I Kill Ml JL Hctp*.wri p~77""7j irttmii [ri-ju u_j| lghO[5l&IIEI3V3~' ,- (* C LdbliHov.'uiiVLhlinn H i b r itd£ui.L-nliun |[ c li i ED 3   NPiTyi* [l i J-j   J?SlBM   <JiiyB3^Hjbijiidl [in i   jE Lis b'm ft"llllilf\itUJn -d f\i" ,ii"ii" <?   B-iilP |ll 1 1   s*>tjF9y jrr 1,1'   fni?il(-UiipoTi II   lMte> | ti I F zi   bS^'CldQdlll'h) III   lend 1<t(nn^nin a* C j- i"   1"l tinil un jl fc   1 isl Craqit^Datp !u~"~*. , ^ ._,* r tti. qm'LKV | ij_______ ri" *   ^.niiii |r 4 ■ jr|   Dn^a^JS j HUM1 /-J   bii4flresiona^s' * (= 4 **   Ld^lilluh CbuweiIiofi |Mi 1 1 n 1 1 *t   Rf>"-t CEunnmlicm j| t 1 1 -- J^   Hw -ft* Accruals FIGURE 1 8.2 Swap Valuation Model