Help for Handling Spreadsheet Compliance

Lora Bentley

Spreadsheet compliance has given finance departments headaches forever, it seems. And no matter what tips, tricks or safeguards various companies develop to correct the problems, someone finds -- or more than likely stumbles into -- a way around them.

So CFO.com compiled the tips and traps sent in by readers and had accounting experts comment, too. It never fails that the best ideas come when you talk to the people in the trenches. Here are just a few of the thoughts:

  • Color-code the spreadsheet tabs to clue readers in to what they need to focus on.
  • Test your own spreadsheets before sending them to your audience or to those who need to add to them before they are used in a presentation or to file financial statements. Nothing is worse for a reader than getting midway through complex analysis only to find an error or errors that change everything he or she has just read. And nothing is worse for a company than having to restate financials because of spreadsheet errors that should have been caught.
  • Version control is critical. Set up a file-name format that each user who make changes to the spreadsheet must use when saving those changes. The file name should identify when the change was made and the user who made the change.

Many tools exist to greatly reduce a company's reliance on spreadsheets, but chances are some will always use them for something. One CFO.com reader had this to say:

Many of us, myself included, use spreadsheets in lieu of IT support. Why? Their lengthy "process," time investment, control of product, and ability to make changes on the fly.

In that case, it's always wise to have policies in place as to how spreadsheets should be handled -- who should create them, what they should include, which file formats are acceptable, who has access once they have been created, who can make changes, where and how they should be saved, when and how they should be protected, and the like. As Richard Block, an adjunct professor of management accounting at Babson College says in the CFO.com piece:

Spreadsheets are too often used as critical parts of the accounting and financial reporting process. Thus, they should be designed to be able to sustain the same critical scrutiny and audit review that is applied to all other accounting and operational processes as part of a Sarbanes-Oxley internal controls review.


Add Comment      Leave a comment on this blog post
Sep 4, 2008 7:38 AM sarah seddon sarah seddon  says:
I thought your article was extremely timely. As you say, spreadsheets are here to stay, in part because of their flexibility and their ease of use all of which can cause headaches for organizations. Tools such as ComplyXL ensure version control with a centralized repository that allows reporting as to who changed a spreadsheet, what those changes were, have they been approved by a manager with the ability to compare different versions. Users can also zoom in on the changes they are particularly interested in it could be that macro changes are a users focus, or perhaps arrays. Whatever it may be, the importance of being able to confirm exactly what information has changed is vital in todays more regulated marketplace. This ability that ComplyXL provides means that the file name doesnt need to reflect when and who made the changes so organizations are able to ensure spreadsheets dont multiply unnecessarily. Reply

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