Spreadsheet Woes – Burden in SOX Compliance and Other Regulations

End User Computing (EUC) or end User Developed Application (UDA) systems like spreadsheets used to be ideal ad-hoc solutions for data processing and financial reporting. But those days are long gone.

Today, due to regulations like the:

  • Sarbanes-Oxley (SOX) Act,
  • Dodd-Frank Act,
  • IFRS (International Financial Reporting Standards),
  • E.U. Data Protection Directive,
  • Basel II,
  • NAIC Model Audit Rules,
  • FAS 157,
  • yes, there?s more ? and counting

a company can be bogged down when it tries to comply with such regulations while maintaining spreadsheet-reliant financial and information systems.

In an age where regulatory compliance have become part of the norm, companies need to enforce more stringent control measures like version control, access control, testing, reconciliation, and many others, in order to pass audits and to ensure that their spreadsheets are giving them only accurate and reliable information.

Now, the problem is, these control measures aren’t exactly tailor-made for a spreadsheet environment. While yes, it is possible to set up a spreadsheet and EUC control environment that utilises best practices, this is a potentially expensive, laborious, and time-consuming exercise, and even then, the system will still not be as foolproof or efficient as the regulations call for.

Testing and reconciliation alone can cost a significant amount of time and money to be effective:

  1. It requires multiple testers who need to test spreadsheets down to the cell level.
  2. Testers will have to deal with terribly disorganized and complicated spreadsheet systems that typically involve single cells being fed information by other cells in other sheets, which in turn may be found in other workbooks, or in another folder.
  3. Each month, an organisation may have new spreadsheets with new links, new macros, new formulas, new locations, and hence new objects to test.
  4. Spreadsheets rarely come with any kind of supporting documentation and version control, further hampering the verification process.
  5. Because Windows won’t allow you to open two Excel files with the same name simultaneously and because a succession of monthly-revised spreadsheets separated by mere folders but still bearing the same name is common in spreadsheet systems, it would be difficult to compare one spreadsheet with any of its older versions.

But testing and reconciliation are just two of the many activities that make regulatory compliance terribly tedious for a spreadsheet-reliant organisation. Therefore, the sheer intricacy of spreadsheet systems make examining and maintaining them next to impossible.

On the other hand, you can’t afford not to take these regulations seriously. Non-compliance with regulatory mandates can have dire consequences, not the least of which is the loss of investor confidence. And when investors start to doubt the management’s capability, customers will start to walk away too. Now that is a loss your competitors will only be too happy to gain.

Learn more about our server application solutions and discover a better way to comply with regulations.

More Spreadsheet Blogs


Spreadsheet Risks in Banks


Top 10 Disadvantages of Spreadsheets


Disadvantages of Spreadsheets – obstacles to compliance in the Healthcare Industry


How Internal Auditors can win the War against Spreadsheet Fraud


Spreadsheet Reporting – No Room in your company in an age of Business Intelligence


Still looking for a Way to Consolidate Excel Spreadsheets?


Disadvantages of Spreadsheets


Spreadsheet woes – ill equipped for an Agile Business Environment


Spreadsheet Fraud


Spreadsheet Woes – Limited features for easy adoption of a control framework


Spreadsheet woes – Burden in SOX Compliance and other Regulations


Spreadsheet Risk Issues


Server Application Solutions – Don’t let Spreadsheets hold your Business back


Why Spreadsheets can send the pillars of Solvency II crashing down

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A Definitive List of the Business Benefits of Cloud Computing ? Part 4

Lowers cost of analytics

Big data and business intelligence (BI) have become the bywords in the current global economy. As consumers today browse, buy, communicate, use their gadgets, and interact on social networks, they leave in their trail a whole lot of data that can serve as a goldmine of information organisations can glean from. With such information at the disposal of or easily obtainable by businesses, you can expect that big data solutions will be at the forefront of these organisations’ efforts to create value for the customer and gain advantage over competitors.

Research firm Gartner’s latest survey of CIOs which included 2,300 respondents from 44 countries revealed that the three top priority investments for 2012 to 2015 as rated by the CIOs surveyed are Analytics and Business Intelligence, Mobile Technologies, and Cloud Computing. In addition, Gartner predicts that about $232 million in IT spending until 2016 will be driven by big data. This is a clear indication that the intelligent use of data is going to be a defining factor in most organisations.

Yet while big data offers a lot of growth opportunities for enterprises, there remains a big question on the capability of businesses to leverage on the available data. Do they have the means to deploy the required storage, computing resources, and analytical software needed to capture value from the rapidly increasing torrent of data?

Without the appropriate analytics and BI tools, raw data will remain as it is – a potential source of valuable information but always unutilised. Only when they can take the time, complexity and expense out of processing huge datasets obtained from customers, employees, consumers in general, and sensor-embedded products can businesses hope to fully harness the power of information.

So where does the cloud fit into all these?

Access to analytics and BI solutions have all too often been limited to large corporations, and within these organisations, a few business analysts and key executives. But that could quickly become a thing of the past because the cloud can now provide exactly what big data analytics requires – the ability to draw on large amounts of data and massive computing power – at a fraction of the cost and complexity these resources once entailed.

At their end, cloud service providers already deal with the storage, hardware, software, networking and security requirements needed for BI, with the resources available on an on-demand, pay-as-you-go approach. In doing so, they make analytics and access to relevant information simplified, and therefore more ubiquitous in the long run.

As the amount of data continues to grow exponentially on a daily basis, sophisticated analytics will be a priority IT technology across all industries, with organisations scrambling to find impactful insights from big data. Cloud-based services ensure that both small and large companies can benefit from the significantly reduced costs of BI solutions as well as the quick delivery of information, allowing for precise and insightful analytics as close to real time as possible.

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Saving Energy Step 4 – Breathing Life into the Project

Today we consider the fourth step on the road to energy saving, when we introduce key contributors who will pull it all together. We have been on quite a journey. We started by developing a management system and then followed up with practical improvements, while challenging the assumptions behind the energy bills we may have paid unchallenged in the past.

After we knock off the big-ticket savings, managing energy becomes a process of improvement characterised by smaller increments. Kaizen is the classic model and it includes everybody in the organization from the janitor to the CEO. I inverted the pyramid deliberately, because ideas deserve considering no matter where the originator parks in the company yard.

People ? our people ?are truly central to the process. Energy adds extra leverage to their efforts, keeps them warm in winter, cool in summer and powers up the ovens in the company canteen. They are brimming over with ideas because that is the nature of being human. The best managers are those who release this potential and participate in its flowering,

It is important not to threaten job security. So many savings-driven initiatives have ended in job losses that people on the shop floor automatically suspect another round. Shrinking carbon footprints is about making the world a better place for everyone. We become more effective when we turn ?increasing profit? into making the enterprise sustainable in itself.

Engaging employees is more than office circulars and speeches at the Christmas Party. Organizations are organic places where trust grows slowly but conflict can flare in a moment. Before involving your people in your energy ?kaizan? make sure your words and intentions overlap perfectly. You will be amazed at the power you unlock in your people.

The best way I know of doing this is through your health and safety structure, which then becomes your environment, health and safety structure EHS. As you explore this idea at safety committees you find these things overlap, in the sense of creating people-centric environments at work and home.

That said, there is no magic formula for achieving employee engagement. The fact that people universally want a cleaner planet is the power to tap into. One way to form a team is to create one artificially and give it a task. The other is to work together towards a shared objective. Which one do you prefer?

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UK Government Updates ESOS Guidelines

Britain?s Environment Agency has produced an update to the ESOS guidelines previously published by the Department of Energy and Climate Change. Fortunately for businesses much of it has remained the same. Hence it is only necessary to highlight the changes here.

  1. Participants in joint ventures without a clear majority must assess themselves individually against criteria for participation, and run their own ESOS programs if they comply.
  2. If a party supplying energy to assets held in trust qualifies for ESOS then these assets must be included in its program.
  3. Total energy consumption applies only to assets held on both the 31 December 2014 and 5 December 2015 peg points. This is relevant to the construction industry where sites may exchange hands between the two dates. The definition of ?held? includes borrowed, leased, rented and used.
  4. Energy consumption while travelling by plane or ship is only relevant if either (or both) start and end-points are in the UK. Foreign travel may be voluntarily included at company discretion. The guidelines are silent regarding double counting when travelling to fellow EU states.
  5. The choice of sites to sample is at the discretion of the company and lead assessor. The findings of these audits must be applied across the board, and ?robust explanations? provided in the evidence pack for selection of specific sites. This is a departure from traditional emphasis on random.

The Environment Agency has provided the following checklist of what to keep in the evidence pack

  1. Contact details of participating and responsible undertakings
  2. Details of directors or equivalents who reviewed the assessment
  3. Written confirmation of this by these persons
  4. Contact details of lead assessor and the register they appear on
  5. Written confirmation by the assessor they signed the ESOS off
  6. Calculation of total energy consumption
  7. List of identified areas of significant consumption
  8. Details of audits and methodologies used
  9. Details of energy saving opportunities identified
  10. Details of methods used to address these opportunities / certificates
  11. Contracts covering aggregation or release of group members
  12. If less than twelve months of data used why this was so
  13. Justification for using this lesser time frame
  14. Reasons for including unverifiable data in assessments
  15. Methodology used for arriving at estimates applied
  16. If applicable, why the lead assessor overlooked a consumption profile

Check out: Ecovaro ? energy data analytics specialist 

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