Organisations are putting themselves at considerable financial and reputational risk by failing to properly control the way they use spreadsheets, according to a study from Protiviti and Institute of Chartered Accountants in England and Wales (ICAEW). The global business consulting and internal audit firm surveyed accountants and finance professionals at an ICAEW event, which revealed that three quarters (75%) said their company did not have a policy or processes in place relating to the design, development and/or control of spreadsheets.
Of those accountants surveyed, almost a quarter (23%) claims their organisation has experienced financial or reputational losses that can be directly attributed to the use of spreadsheets or poor controls governing the use of spreadsheets. More than a third (37%) of those surveyed believe their organisation has adequate risk management processes in place to mitigate spreadsheet risk, and 73% said their firm was not doing enough to prevent future errors from occurring.
Ewen Ferguson, director, Protiviti, said: “It’s clear that the risks associated with the use of spreadsheets are not taken seriously enough by the vast majority of UK organisations. While a well-built spreadsheet can be a hugely powerful business tool, its flexibility also presents organisations with a significant set of risks with potentially disastrous consequences.
“Over the past three years we have seen a significant increase in the number of clients asking for help to understand and mitigate spreadsheet risk within their organisations. This is due, in part, to regulators and auditors showing far greater interest in the way spreadsheets are developed, used and controlled. Organisations themselves are also becoming increasingly aware of the risk due to their internal risk management processes,” he added.
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