how to take control of spreadsheet risk
DESCRIPTION
A version of "How To Take Control of Spreadsheet Risk" was given by Diane Robinette, president of Incisive Software at the Los Angeles chapter of the IIA's March meeting.TRANSCRIPT
Taking Control of Spreadsheet RiskDiane Robinette, President
April 8, 2014
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Objective Help you understand where spreadsheet risk
hides so that you can have informed conversations with your users to: Improve the quality of spreadsheets Reduce the time spent finding errors Implement effective internal controls
© 2014 Incisive Software Corporation. All rights reserved.
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Agenda Business Challenges Technology’s Role Spreadsheet Uses Areas of Spreadsheet Risk Case Studies
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Companies have spent millions of dollars on enterprise software TRYING to replace spreadsheets
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Spreadsheet Uses
Simple Calculations “What if?” Analysis
Collect data from multiple
people
Charts and Reports
User Interface to Software
Systems
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Spreadsheets: Love Me, Love Me Not
• Allows for flexibility and agility• Does not require IT
intervention• Does not require users to
change the way they work• Cost of entry is “free”
© 2014 Incisive Software Corporation. All rights reserved.
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Spreadsheets: Love Me, Love Me Not
• Allows for flexibility and agility• Does not require IT
intervention• Does not require users to
change the way they work• Cost of entry is “free”
• Error prone• Possibility for data corruption• No data validation• Security and controls is limited• Cost and complexity increases
over time
© 2014 Incisive Software Corporation. All rights reserved.
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Mistakes happen…
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Bad happens…
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Early Spreadsheet Technology 1979
Software Arts VisiCalc Columns and Rows Formula command line
Ran on an affordable, personal machine
1983 Lotus 1-2-3 Quickly replaced VisiCalc
1985 Microsoft Excel
Pull down menus Point and click using a mouse
Sources: www.bricklin.com, http://www.dssresources.com/history/sshistory.html
VisiCalc v1.0
1-2-3 v1.0
Excel v1.0
© 2014 Incisive Software Corporation. All rights reserved.
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Today: Microsoft Excel 2010 1,048,576 rows by 16,384 columns 66,530 hyperlinks Length of formula contents = 8,192
characters Dependency on a single cell = 4 billion
formulas
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Areas of Spreadsheet Risks Formula Errors Defies Best Practice Hidden Information Difficult to see
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Formula Errors Formula Fails to Cover Area Inconsistent Formulas Data in Formula Range LOOKUP Validation Currency Error Complexity
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Defies Best Practice Constant in Formula Forward Reference Number Formatted as Text Referencing Blank Cells Referencing White Space
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Hidden Information Hidden Rows and Columns Hidden Sheets Hidden by Color or Formatting Hidden by Protection
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Difficult to See External References Missing External References Conditional Formatting Reference Named Ranges Formulas Reference No Other Cell Outlayers
© 2014 Incisive Software Corporation. All rights reserved.
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Standardize Spreadsheet ModelsCompany Real estate development, investment and
management firm with $24.8B in assets under management
Objective Improve the quality of spreadsheet, consistent modelsSolution Create “perfect” templates Deploy technology for Internal Audit to compare
spreadsheets to templates and evaluate discrepanciesBenefits Consistent and accurate spreadsheets
© 2014 Incisive Software Corporation. All rights reserved.
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Spreadsheet Governance ProgramCompany $1.2B global chemical products manufacturing companyObjective Reduce risk of critical spreadsheets on the organizationSolution Develop spreadsheet inventory to identify top 1000 “In
Scope” spreadsheets Deploy technology for users of critical spreadsheets to
scan spreadsheets to highlight risks Implement internal control: users must scan critical
spreadsheets at least once a quarterBenefits Scalable spreadsheet governance program Improved spreadsheet quality
© 2014 Incisive Software Corporation. All rights reserved.
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Proactive Business UnitCompany Fortune 10 International Oil and Gas CompanyObjective Accurate and reliable global tax spreadsheetsSolution Deploy technology for global tax users of
spreadsheets to scan spreadsheets to ensure spreadsheets are working properly
Benefits Confidence in tax spreadsheets
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Contact
Diane M. Z. RobinettePresident
© 2014 Incisive Software Corporation. All rights reserved.