Back in the day, even when you had to insert the date backwards into Lotus 123, compliance professionals were very grateful to the those clever folk in Silicon Prairie for that application that could cope with all those lists, calculations and other things regulators and senior management expected you to be able to produce at the drop of a hat.
The spread sheet was born and its widespread acceptance seemed to the average user to be the solution to all our problems,….but was it? At first sight, with a little bit of training or help from someone who was marginally better informed, compliance professionals whose legal or audit backgrounds didn’t naturally lend themselves to electronic sorcery found a helpful friend and versatile tool. However overtime, the mystique has waned as the limitations of spread sheets have become apparent in the modern work and regulatory environment.
We thought spread sheets were great. Yet we have seen they can let you down at the critical moment. How many times have we heard about FCA findings or S.166 reports that detail firms’ failings resulting from excessive reliance on spread sheets. So let’s take a look at some of the drawbacks:
Firstly, file corruption. That spread sheet that Fred started years ago has grown so big with so many rows, columns and formulas that one tiny looped logic or clumsy entry can cause the file to become corrupted and rendered useless.
So what do we instinctively do? We create a back-up. Then what happens? Someone accidently saves corrupting data onto the back-up or worse, because of ill-disciplined version control, other users access different copies and the integrity of the precious data you are going to present as demonstrating everything is working dandy diverges and you don’t where you are.
So what do we do now? Well we know that the spread sheet has become unstable, so only senior people who really know how it has been construed and have a career saving vested interest to keep it all together limit it to themselves and end up as the only users.
So you are back to where we started because more junior people are barred and that versatile tool poised to free up our time is left with you just when you thought the humble spread sheet would simplify the process.
Secondly, data corruption. Complicated spread sheets with formulas spanning multiple fields or even workbooks are prone to corruption when new columns, rows or fields are added and the formulas not updated. They also get junky in size and take ages to open and close. Good practice says that fields with formulas should be locked down and password protected, but this isn’t often enough particularly where a spread sheet is adapted for use for different purposes. The output of the data can quickly become corrupted when the limitations of spread sheets come into play.
Thirdly, absence of an audit trail. Spread sheets don’t tell you when and who just accessed the data and what the data was immediately before it was changed. Tracking down what has just happened is very difficult and won’t stand up to much scrutiny. Remember the case of the finance team member who changed his salary number in his firm’s payroll spread sheet immediately before he sent it to the payroll agents and changed it back to the correct salary for the rest of the month. It took years before he was found out and only because he made a mistake and didn’t change back the amount he was due.
Fourthly, portability. It’s very difficult to stop vital and sensitive spread sheets or “Save As” copies thereof from leaving the building by email or otherwise. Almost everyone has a PC at home which can open almost any spread sheet format. The prospect of that data leaving your firm should leave you with a shiver down your spine. When you do want legitimately to share your spread sheet with someone not necessarily on your network share you find it’s too big to email over and you end up having to go to extreme lengths to give them what they need.
So what’s the solution? Click here to read the concluding part of this article.
Paul Lack is a CF10a for R.J. O’Brien Limited.
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