EXCEL NOT CUTTING IT FOR AUDITS

Are you still creating financial statements in Excel? You’re not alone. Excel is one of the most utilized spreadsheet applications in the business world–but it is often being used for tasks it wasn’t designed for.

Excel’s greatest strength is its simplicity in creating and editing spreadsheets. This is also its biggest drawback. In the current age of stringent audits, a CFO, Accountant or even a Bookkeeper can be required to certify that final financials are accurate. Using Excel can be risky, requiring one to assume that the Excel numbers or formulas have not been altered and that linked spreadsheets are providing accurate information.

In a recent survey by Data Management Inc., over half of respondents say they spend a great deal of time correcting spreadsheet errors. The survey shows a strong belief among the participants that fixing inaccurate spreadsheets is part of their job duties.

“So many companies, right up to the Fortune 500, do their final analysis and consolidation in Excel spreadsheets,” says Tony Munns, a member of Brown Smith Wallace, who runs the risk management practice for the St. Louis-based firm. “Anyone can deliberately or accidentally change a field and it won’t necessarily be found.” In a recent telephone survey to companies undergoing an audit, nearly one half of the participants reported that auditors are expressing displeasure when told that the company’s financials were done using a spreadsheet.

Human error in both design and implementation is another factor contributing to the unsuitability of spreadsheets for financial reporting. Typos happen, and numbers that appear accurate may be taken at face value and not checked for discrepancies, leading to potentially disastrous results.

Incorrect information is also part of the equation. An Excel spreadsheet can only process the data that it is given and provide output based on that information. The mantra “garbage in, garbage out” continues to ring true.

Consider the following scenario: An organization is using a series of linked spreadsheets to create financial output. The worksheet designer has left the organization, so when problems arise they are not fixed at the source; rather, temporary patches are put into place to address the issue in the short term. Eventually the system will need to be redesigned from the ground up, with additional safeguards in place, costing the organization time and money.

ACC Accounting Solutions offers a variety of cost-effective solutions to improve the efficiency of your accounting staff, including steps to mitigate the risk associated with publishing financial reports. Our programs are designed to review your existing spreadsheet, meet the specific training needs of your staff, and help you transition your business to a dedicated financial reporting software that meets your particular business needs. Most projects involve a combination of a few days on site and a few days online to get you up and running.

Using Microsoft FRx software we have assisted many small to mid-size companies in becoming less dependent on Excel and more efficient in creating and distributing accurate financial reports. Why not give us a call to find out how we can do the same for you?


Solutions by Industry

What's New

The 5 Most Common ERP Objections

Making the decision to upgrade from a basic accounting software to a robust ERP system can come with challenges. Not everyone will be on board or open to the idea of change. Throughout our years in practice, we have found the following common objections to adopting a new software.  Read More

Submitted by Ally Donahue on Fri, 01/22/21 - 11:33

ERP Hierarchy of Needs

Maslow's Hierarchy of Needs a psychological concept that people are willing to fulfill basic needs before pursuing higher level needs. This theory was created in 1943 by Abraham Maslow. The five levels, physiological, safety, connection, esteem, and self-actualization are all components of what humans need. Just like we need these basic necessities, so does a company when implementing a new ERP system. All five levels in an ERP sense are vital to future system success. Below you will find a creative infographic highlighting the similarities of each human need to each ERP need. Read More

Submitted by Ally Donahue on Fri, 01/15/21 - 12:36

Why an ERP System Isn’t “One Size Fits All”

Have you seen the phrase, “One Size Fits All”, marked on different types of clothing? Most items labeled as such usually are very plain and have a standard size to accommodate most. Of course there are outliers and truly not everyone can fit in a one sized option. This is also true of  ERP systems; they cannot be “One Size Fits All” due to complexities. Read More

Submitted by Ally Donahue on Fri, 01/08/21 - 10:27

Whatever Your ERP Needs, We Have the Solution!

Or call us for a free consultation 866-379-3799