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What protocols does your company use to minimize spreadsheet risk?

This question was posed by Jeff in a LinkedIn Group. The Question: Jeff Gilmore Business Consultant at PARIS Technologies International Spreadsheets are common in the world of business. As they have become more widely accepted, spreadsheets have been employed for increasingly critical business applications. They are regularly used for clerical tasks, for modeling and analysis, and for communication. The popularity of spreadsheets also has a downside. Stories of business failures, lawsuits, and governmental investigations sometimes appear in the press or on the Internet, with errors in spreadsheet use cited as the reason for the mishap. I'd like to know what policies/procedures your company employs to minimize these errors.


Topic Expert
Barrett Peterson
Title: Senior Manager, Actg Stnds & Analysis
Company: TTX
(Senior Manager, Actg Stnds & Analysis, TTX) |

We have risk evaluated and ranked our major spreadsheets, and use a combination of policies and practices involving design characteristics, preference for self contained spreadsheet files, size, limitation of links to separate files, cell locking, control totals, password protection, and required change control and approval, each as appropriate for the objective of the spreadsheet/file.

Ralph Baxter
Title: CEO
Company: ClusterSeven
LinkedIn Profile
(CEO, ClusterSeven) |

Here are four resources that you may find useful. Number 2 seems to have become the default component of all corporate policies.

1. PWC: Managing Critical Spreadsheets

2. PWC: Spreadsheets: considerations under the Sarbanes Oxley Act

3. Deloitte: End user computing solving the problem

4. Protiviti: Spreadsheet management FAQs

Topic Expert
Charley Kyd
Title: Founder
Company: ExcelUser
(Founder, ExcelUser) |

Companies use spreadsheets for many different purposes. So I'll address only one of these: periodic reporting.

The problem with most spreadsheet reports is that they're typically "hand-carved." Excel users start with raw data, then they sort it, filter it, add formulas, change formulas, clean the data, transform the data, change formulas again, and finally produce a result for distribution.

In this environment, it's amazing that the error rate isn't much higher than it typically is.

Instead, Excel reports should consist of two separate sections: a worksheet database, and worksheet reports that use formulas that return data from the database.

This structure brings two significant benefits...

First, it saves time. This is because updating takes only three steps:

(1) Update the data worksheet(s).
(2) Change the report date in a single cell in each report.
(3) Recalculate the report to cause formulas in the report to return new data from the data worksheet(s).

Second, it reduces errors for three significant reasons:

(1) Spreadsheet reporting becomes a *repeatable process*. Therefore, users have virtually no opportunity to introduce new errors to an existing periodic report.

(2) Extensive data is available for reconciliation. This allows reports to display obvious error messages when reports don't reconcile with the source data.

(3) Error corrections stay corrected. This is because the corrected report will be used each period in the future, with only the report date changed. Said another way, this process ratchets up the quality of each periodic report.

In short, an Excel report that contains values in cells is a risky report. But an Excel report with only formulas that return numbers from a structured source of data offers *much* less risk.

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