2008-07-24 18:27:44 - Up to 90% of spreadsheets contain material errors, resulting in multi-million dollar losses. Today, there are increased regulation and compliance initiatives that impact spreadsheet control. This regulatory pressure is increasing the focus that auditors place on spreadsheet risk management and it's a key area that organizations must address to remain healthy and competitive.

WHO:

Grenville Croll, C.Eng, MBCS, CITP, and Trintech Spreadsheet Management and Compliance Specialist. Croll is the UK's leading specialist in spreadsheets, spreadsheet applications, research relating to spreadsheets, and the tools and techniques required to identify, remediate, and control organizational spreadsheets. Croll has extensive experience in business management and has consulted widely in the areas of Risk Management, Financial Modelling, Financial Forecasting and Process Optimization. He is also an experienced management trainer with over two decades experience of presenting complex techniques to senior management. Currently, Croll is the Chairman of EuSpRIG, the spreadsheet research organization. He holds an honours degree in Computer Science, is a Chartered Engineer, and a Member of the British Computer Society. His spreadsheet research work is published

on www.arxiv.org, the Cornell University moderated scientific repository, which is publicly available and free of charge.

WHAT:

How much money is lost annually due to problems with spreadsheet errors?

Staggeringly Bloor Research suggests the following: 'It is probably safe to say that corporate America, for example, loses in excess of $10B annually through the misuse and abuse of spreadsheets. That's a big number: it suggests a problem worth managing.' This research is three years old! So, just how is the industry addressing this problem?

Last week the 9th Annual European Spreadsheet Risk Conference took place and this brought together academics and practitioners who take this problem seriously. We've all read the many media tales about financial institutions losing vast sums of money by allowing scheming traders free reign to manipulate data in an uncontrolled environment. EuSpRIG members have been tracking this scenario and a catalogue of disasters for a very long time. Chairman of EuSpRIG, Grenville Croll provides his take on the recent conference.

Mismanagement of critical spreadsheets is endemic!

Over the last three years there has been very little change in corporate behavior. Regulatory compliance has played a major role in moving the issue of critical spreadsheets to the forefront, particularly in their relation to financial reporting; however, far too many enterprises still rely on spreadsheets - stored in various and multiple locations and accessed millions of times. These same enterprises, by ignoring the proper management of these spreadsheets, are likely to find themselves in breach of regulatory and audit compliance procedures.
The Conference provided a good venue, with participation from academics, solution vendors, and end-users, to learn just how spreadsheet risk is being addressed. Twenty papers were delivered all under the Conference umbrella title, In Pursuit of Spreadsheet Excellence.

Some of the largest European banks were represented. Allied Irish Bank (AIB) should be singled out for the tremendous work they're doing to increase awareness of spreadsheet control issues. Andrew McGeady outlined the remediation tools that the bank has implemented to help manage this problem. AIB had there own business challenge - recovering from a $691M loss in 2001 - a result of fraud related to mismanagement of spreadsheets. It's no surprise that they're leading the way in best practices.

Dr Jamie Chambers highlighted some of the challenges faced when trying to implement control frameworks, management buy-in, and training across the organization. Of course, it goes without saying that change is always difficult when you're asking employees to do something differently, but there are technologies available today that ensure tighter controls are working in the background, all while leaving end-users unaware of any change.

Why is controlling spreadsheets so difficult?

Mbwana Alliy of Microsoft and Patty Brown of Two Degrees explored the disparity that exists in the business world between the importance of spreadsheets containing financial data (created by accounting and finance professionals) and the resources devoted to global spreadsheet standards, training, and accredited certification in spreadsheet proficiency, and the awareness of emerging technologies as they relate to spreadsheet use. The question for enterprises taking data from critical spreadsheets and then making key business decisions based on that data is: who owns the spreadsheet application/s - IT or the finance professional?

All enterprises should undertake a discovery, remediation, and risk audit of all critical spreadsheets to ensure that controls are robust, risk is mitigated, and errors reduced. Using technology to address these challenges is a cost effective and efficient way forward, as Eric Perry of Prodiance concluded in his paper, Automating Spreadsheet Discovery & Risk Assessment.

MEDIA CONTACT:
Donna Martinez, Marketing Communications Manager, Trintech phone: 972-739-1611, email: donna.martinez@trintech.com, web: www.trintech.com