LONDON - 1 April 2011 - ClusterSeven, an international provider of strategic spreadsheet and data management software, has today urgently called upon organisations to address the hazards introduced by spreadsheets and to allocate ownership of managing this risk.
Companies in all sectors are putting themselves at increasing financial and reputational risk as end-users continue to use spreadsheets as critical operational and financial applications across the business. Despite a desire to replace these with robust applications the reality is that spreadsheets are often the only solution that can address immediate needs. This issues was recently highlighted in the FSA’s Solvency II Internal Model Approval Process, noting that spreadsheets in many organisations are not controlled by IT but by other business or control areas, and thus do not form part of their corporate governance processes.
Ralph Baxter, CEO of ClusterSeven, said:“Companies must focus on managing spreadsheet risk, but unfortunately, as yet, it hasn’t been given top priority. While it is encouraging that the FSA is treating spreadsheet risk as a serious issue, there are still vast numbers of organisations leaving themselves open to the danger of financial and reputational risk by not establishing an ownership policy.”
“By allocating direct responsibility and establishing a unified risk management process, organisations can start to mitigate the threats they face. In some companies spreadsheet risk isn’t even on the agenda; it is only when a serious financial mistake occurs that this subject is given priority.”
The purposes of spreadsheets are widespread, from performing complex modelling for trading decisions to accounting reconciliations and financial reporting. A review of a typical corporate network would reveal thousands to millions of spreadsheets in use. The most pressing question that needs answering is: who manages these spreadsheets and ensures that the results they produce are valid?
According to a study* by Deloitte, 70 percent of companies rely on spreadsheets to support their business-critical financial reporting. Bodies such as the Institute of Internal Auditors, the Financial Industry Regulatory Authority, and the Public Company Accounting Oversight Board have all demanded more attention from auditors.
Ralph Baxter, concludes:“The increased regulation and compliance that now impacts spreadsheet usage is not surprising given that the past number of years have seen numerous multimillion-pound errors and frauds attributed to the use of spreadsheets. Central control and clear allocation of responsibilities will help ensure that the risk presented by spreadsheets is understood and appropriately managed.”
|
