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


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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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2015 ESOS Guidelines Chapter 3 ? The ESOS Assessment

ESOS operates in tandem with the ISO 50001 (Energy Management) system that encourages continual improvement in the efficient use of energy. Any UK enterprise qualifying for ESOS that has current ISO 50001 certification on the compliance date by an approved body (and that covers the entire UK corporate group) may present this as evidence of having completed its ESOS assessment. It does however still require board-level certification, following which it must notify the Environment Agency accordingly.

The Alternate ESOS Route

In the absence of an ISO 50001 energy management certificate addressing comprehensive energy use, a qualifying UK enterprise must:

  1. Measure Total Energy Consumption in either kWh or energy spend in pounds sterling, and across the entire operation including buildings, industrial processes and transport.
  2. Identify Areas of Significant Energy Consumption that account for at least 90% of the total. The balance falls into a de minimis group that is officially too trivial to merit consideration.
  3. Consider Available Routes to Compliance. These could include ISO 500001 part-certification, display energy certificates, green deal assessments, ESOS compliant energy audits, self-audits and independent assessments
  4. Do an Internal Review to make sure that you have covered every area of significant consumption. This is an important strategic step to avoid the possibility of failing to comply completely.
  5. Appoint an Approved Lead Assessor who may be internal or external to your enterprise, but must have ESOS approval. This person confirms you have met all ESOS requirements (unless you have no de minimis exceptions).
  6. Obtain Internal Certification by one of more board-level directors. They must certify they are satisfied with the veracity of the reports. They must also confirm that the enterprise is compliant with the scheme.
  7. Notify the Environment Agency of Compliance within the deadline using the online notification system at snapsurveys.com as soon as the enterprise believes is fully compliant.
  8. Assemble your ESOS Evidential Pack and back it up in a safe place. Remember, it is your responsibility to provide proof of the above. Unearthing evidence a year later it not something to look forward to.

The ESOS assessment process is largely self-regulatory, although there are checks and balances in place including lead assessor and board-level certifications. As you work through what may seem to be a nuisance remember the primary objectives. These are saving money and reducing carbon emissions. Contact Ecovaro if we can assist in any way.

How Volvo Dublin achieved Zero Landfill Status

The sprawling New River Valley Volvo plant in Dublin, Virginia slashed its electricity bill by 25% in a single year when it set its mind to this in 2009. It went on to become the first carbon-neutral factory in 2012 after replacing fossil energy with renewable power. Further efforts rewarded it with zero-landfill status in 2013. ecoVaro decided to investigate how it achieved this latest success.

Volvo Dublin?s anti-landfill project began when it identified, measured and evaluated all liquid and solid waste sources within the plant (i.e. before these left the works). This quantified data provided its environmental project team with a base from which to explore options for reusing, recycling and composting the discards.

Several decisions followed immediately. Volvo instructed its component suppliers to stop using cardboard boxes and foam rubber / Styrofoam as packaging, in favour of reusable shipping containers. This represented a collaborative saving that benefited both parties although this was just a forerunner of what followed.

Next, Volvo?s New River Valley truck assembly plant turned its attention to the paint shop. It developed methods to trap, reconstitute and reuse solvents that flushed paint lines, and recycle paint sludge to fire a cement kiln. The plant cafeteria did not escape attention either. The environment team made sure that all utensils, cups, containers and food waste generated were compostable at a facility on site.

The results of these simple, and in hindsight obvious decisions were remarkable. Every year since then Volvo has generated energy savings equivalent to 9,348 oil barrels or if you prefer 14,509 megawatts of electricity. Just imagine the benefits if every manufacturing facility did something similar everywhere around the world.

By 2012, the New River Valley Volvo Plant became the first U.S. facility to receive ISO 50001 energy-management status under a government-administered process. Further technology enhancements followed. These included solar hot water boilers and infrared heating throughout the 1.6 million square foot (148,644 square meter) plant, building automation systems that kept energy costs down, and listening to employees who were brim-full with good ideas.

The Volvo experience is by no means unique although it may have been ahead of the curve. General Motors has more than 106 landfill-free installations and Ford plans to reduce waste per vehicle by 40% between 2010 and 2016. These projects all began by measuring energy footprints throughout the process. ecoVaro provides a facility for you to do this too.

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