Introduction to finding errors in Excel spreadsheets

Introduction to finding errors in Excel spreadsheets

This course is about ways to reduce the probability of errors in spreadsheets affecting your company. Why is this such a issue?

Research into spreadsheet error occurrence

Research has shown that the majority of spreadsheet models contain errors.  So the probability of errors in your spreadsheets is high. Why are spreadsheets so error prone. We believe it normally comes down to human error. Throw in some time constraints and inadequate training and you are just asking for trouble.

There is also growing evidence of spreadsheet errors seriously affecting organisation worldwide. Have a look at some of the recently reported cases on the EUSPRIG site

As business decisions get bigger, and as the power of spreadsheets increases it is likely that the situation will only get worse, with spreadsheets losing companies more money than ever before.

How do you address this risk in an organisation?

Below is the way we like to address the risk of spreadsheet errors in organisations

Dealing with Spreadsheet Errors

  • First and foremost you must acknowledge the risks posed by spreadsheets.The issue is potentially very serious. The most senior people in your company must be made aware of the risks. Only with their backing can you start to reduce the risk. If they don’t believe you, send them to our web site to see what has happened to some of their international peers.
  • To reduce the probability of spreadsheet errors, educate users on the risks. I suggest that training for spreadsheets should be focused on reducing the risks. Supply education on how to build good, SAFE, spreadsheet models and have access to training material.
  • Give everyone who works on spreadsheets access to a tool like Spreadsheet Professional. It is a bit unfair to ask users to build safe spreadsheets, but only provide the error checking tools to the auditors!
  • If you have an intranet consider setting up electronic based help so that your people can access the information when they need it instead of when a trainer is available.
  • Consider making Spreadsheet Professional available to your entire organisation. The tool is the only means to improve the efficiency and effectiveness of spreadsheet reviews. It is very affordable and will pay itself off with the first error found.

What about addressing the impacts?

You can and should implement the various policy statements to ensure that everyone is aware of their responsibilities. However, practically this has a limited impact.

Rather focus on providing the skills and resources to review spreadsheets. Then set up value limits.

Depending on the size of your organisation set a level at which an independent, internal review should be performed. At a higher level recommend an external independent review. Self reviews should be mandatory for all spreadsheets built and relied on but make sure that the users have the tools required to efficiently do the testing.

Conclusion

There is no doubt in my mind that spreadsheets are extremely useful in the business world. The sheer power of these spreadsheets means that they will be with us for years to come. We just need to understand and mitigate the risks.

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