As business accounting becomes increasingly reliant on technology, errors in spreadsheets could pose a threat to the financial stability of many companies, according to the Institute of Chartered Accountants in England and Wales (ICAEW).
A report reveals that half of accountants feel that errors occur in spreadsheets with a frequency that is “very high” or “fairly high”. Three quarters of those surveyed labelled spreadsheet errors as a major potential risk for businesses.
The report found that:
- 54% of errors come from not being able to track who has made changes
- 42% come from too many people having access
- 39% of mistakes are the result of a lack of training.
Two thirds of respondents believe that it is likely that a large UK company will suffer financial damage as a result of spreadsheet failures in the next 2 years.
Richard Anning, head of ICAEW’s IT faculty, said:
“We know flawed spreadsheet design and lack of formalised training can lead to significant costs. Errors, however, often remain unspotted which means the damage is difficult to recognise or measure.”