- More than half (58%) of accountants state that the frequency of errors found on spreadsheets is either ‘very high’ or ‘fairly high’, according to new research
- Almost three quarters (72%) ranked ‘spreadsheet risk’ as a major business risk
- Two thirds think it is likely that over the next two years a large company in the UK will suffer financial and/or reputational losses due to a spreadsheet-based data failure
- The Institute of Chartered Accountants in England and Wales (ICAEW) warns that spreadsheet errors often remain unspotted which means the damage is difficult to recognise or measure
London – 09 September, 2015 – Two thirds of accountants (68%) think it is likely that over the next two years a large company in the UK will suffer financial and/or reputational losses due to a spreadsheet-based data failure. This is according to new research1 commissioned by ClusterSeven, a leading provider of end-user computing (EUC) management solutions to global financial services institutions and businesses.
According to the study, more than half (58%) stated that the frequency of errors found on spreadsheets was either ‘very high’ or ‘fairly high’. The majority of respondents (90%) believed that over the next two years, regulators and other key stakeholders such as auditors will take an increasing interest in the use of spreadsheets and corporate data management.
The top three reasons cited as to why errors are found on spreadsheets were given as: no system in place for checking/ tracking who has made changes and when (54%); too many people have access to key spreadsheets (42%); and insufficient training/ understanding of how to use spreadsheets (39%). In addition, only half of respondents (50%) said they were able to fully understand the historical changes to formulas, data and macros that have been made during recent usage of spreadsheets.
Richard Anning, Head of ICAEW’s IT Faculty, said: “We know flawed spreadsheet design and lack of formalised training can lead to significant costs. Errors, however, often remain unspotted which means the damage is difficult to recognise or measure. With nine out of ten respondents agreeing finance professionals will increasingly rely on spreadsheets and data management, this is a major concern for both businesses and UK economy.”
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Ralph Baxter, CEO of ClusterSeven, said: “Accountants and financial professionals are exposed to spreadsheets and similar applications more than most people, and the message they are sending is that the propensity for critical errors on spreadsheets is profound – unsurprisingly, almost three quarters (72%) ranked ‘spreadsheet risk’ as a major business risk. The challenge for businesses and financial institutions is that the quality of data held and managed on spreadsheets, and the processes behind validating this data, are increasingly being reviewed by stakeholders such as regulators as the inherent fallibility of spreadsheets becomes ever more apparent.”
The research by ClusterSeven found that around one in 10 (9%) reported that more than 30% of their time is spent checking spreadsheets and similar applications for errors. A quarter (26%) said there is no control policy applicable to spreadsheets at their firms; 41% said there is a manual control policy but it is not always applied, while only 5% said there is an automated control policy that allows them to fully understand the changes between different versions of the spreadsheets.
ClusterSeven’s technology allows financial institutions and businesses to validate, analyse and control the use of business-critical spreadsheets and similar applications and databases. The firm’s products automatically document activity to detect problems such as spreadsheet errors and security risks – and the firm has seen interest in its solutions grow significantly as institutions seek to improve the accuracy and guardianship of their data. Its clients include many global companies as well as leading insurers, investment managers, energy firms and manufacturers.