Spreadsheet Errors: True Cost

Spreadsheet Errors hortgsc Mortgsge TRUE COST ment Cash Outla 10.0% 95% 0.0% of spreadsheets contain errors Monthly 2.0% 09 of users believe their Year 1 models are error-free Year 2 4.500 Yeal 1540 55.620 50% (6.67 59.0 of executives admit 48.946 (7.08 of complex models 1 spreadsheet errors led to staff dismissal 51,418 <.67 contain material defects 2.548 31.92 2.623 52,960 54,549 2000 RISKS: 203 4.246 618 937 Overconfidence: 2.851 nobody is looking for errors - hence nobody finds them Human error: spreadsheets are rarely tested 3.090 Interpretation: 300 decision makers are confident 209 in spreadsheet output, despite evidence to the contrary Fraud: lack of controls and ease of replication - perfect enviroment 328 2.122 for fraud poor archiving leads to weaknesses in version controls - operational risk ô ô Archiving: Disturbing Picture Every study found unacceptable rates of spreadsheet errors. Developers and organisations appear to be in a state of denial. Many corporate decisions will continue to be made on the basis of questionable analyses. Only a few of spreadsheet users have formal training. 34 OK? 37. ARGUS Software solutions can help you avoid risks associating with running your real estate portfolio on spreadsheets, save time spent performing valuations and ultimately improve your profitability. Build fortunes, not spreadsheets.™ 14.17% .548 16,286 15.068 3.486 15.38% 360 European Spreadsheet Risks Interest Group, www.eusprig.org Panko, R.What We Know About Spreadsheet Errors, Journal of End User Computing's Special Issue on Scaling UpEnd User Development, vol. 10, No. 2 Spring 1998, revised May 2008. Pryor, L. When, Why and How to Test Spreadsheets, Proc. European Spreadsheet Risks Int. Grp, 2004 Powell, S., Lawson, B, Baker, K.Impact of Errors in Operational Spreadsheets, Proc. European Spreadsheet Risks Int. Grp, 2007 Croll, G. Spreadsheets and the Financial Collapse, EUSPRIG Caulkins, J, Morrison, E, Weidemann T. Spreadsheet Errors and Decision Making: Evidence from Field Interviews ACCA: Talking Technology (May 2008). 3.738 S.E27 Sources ARGUS argussoftware.com SOFTWARE An Altus Group company