Risk in Spreadsheets - Control Required

A recent CFO.com article reminds me why everyone loves spreadsheets – quick to create, easy to use, the ideal business tool. Although there is a snag - availability risk. Management’s inability to identify critical spreadsheets so that they can gain control over their use,  is most concerning to auditors.  Due to the preponderance of spreadsheets across an organization the identification process can seem daunting. The IIA gets it right – start first with those that support the financial close. Errors in the financial close process expose a company to unacceptable levels of risk and not being able to identify the source data (often held in an unidentified spreadsheet) or monitor who created it or had access to change it is a serious problem when it comes to demonstrating  transparency and ensuring accuracy. Think of those companies who have lost shareholder value and confidence as a result of misreporting based on spreadsheet information.

Quality and timeliness of financial reporting impacted by a lack of spreadsheet control looms like a black cloud over many an organisation. Many are still burying their heads in the sand, thinking it’s too difficult or costly to solve.  This is no longer the case.  As I say,  pick the financial close as your starting point, wrap some spreadsheet control software around it so that as managers you can identify where the information came from and you can face the auditors without that big black cloud above you.