Extensive use of spreadsheets Organizations‟ heavy reliance on spreadsheets have made these User Developed Applications (UDA) into high-risk office tools. Simple spreadsheet errors like leaving out a negative sign or a cut-and-paste mistake have already caused million-dollar discrepancies. Also, when a fraudulent employee enters into the picture, the risks become unimaginable. For example, TransAlta‟s spreadsheet cut-and-paste glitch (the company later called this a “simple clerical error”) which caused the energy firm a $24 million loss or Fidelity‟s overstatement of its earnings owing to the omission of the minus sign on the spreadsheet of a $1.3 billion net capital loss. In both cases and in many other similar spreadsheet fiascos, the errors played a major role in the organization‟s decision-making, leading to disastrous results including, but not limited to financial loss, shattered investor confidence and public embarrassment. There‟s more than enough reason to believe that this is so. We have put together five strong points to support this: According to Thomas (2007), Extensive use of spreadsheet models may significant business problems. These problems, according to the European Spreadsheet Risks Interest Group (EuSpRIG), a consortium of academics, researchers and professionals who examine spreadsheet risks and develop methods for prevention are ignored due to a widespread failure to inventory (keep records of), test, document, backup, archive and control the legions of spreadsheets that support critical corporate infrastructure," says the site. These problems or risks include: 1. 2. 3. 4. Lost revenue and profits; Mispricing and poor decision making due to prevalent but undetected errors Fraud due to malicious tampering Shattered investor confidence and public embarrassment
Reference: 1. Thomas Kennedy, „2007, Eight of the Worst Spreadsheet Blunders‟, viewed 28th June 2012, http://www.cio.com/article/131500/Eight_of_the_Worst_Spreadsheet_Blunders