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Spreadsheet Risk Management

Reliance on spreadsheets without a proper strategy can create risk.

Sometimes it seems like CFOs and accountants have spreadsheet dreams. Or maybe it's a nightmare. Data quality in accounting is vital - without it, you and your clients could be making major business and strategic decisions informed by inaccurate or completely wrong information.

As Jonny Evans reported for CIO magazine, a survey from Protiviti found that approximately 10 percent of accountants think their firms have a standard set of rules or policies for managing the risk presented by spreadsheets.

Evans explains spreadsheet risk pops up when data is incorrectly entered into the system, which can have a snowball effect on any decisions made based on that information and may also impact your compliance. "Poor spreadsheet usage training, data entry mishaps, and lack of accountability - ownership of data entry - contribute" to this problem, he says.

Scott Bolderson, Protiviti's director of IT consulting, was quoted by the source as noting that 94 percent of an organization's spreadsheets have errors. While not every mistake will lead to a financial loss, Bolderson said, there's no way of knowing which ones will create problems later, unless a company is actively managing its spreadsheets and verifying their accuracy.