Sarbanes-Oxley is not Excel’s friend for budgeting and planning
Over the last few years I have worked with companies that have investment thousands on implementing Sarbanes-Oxley guidelines but quite a few of them still fall at the last hurdle. And why is that, it can some down to simply using Excel for functions that is really was not built for.
In the post Sarbanes-Oxley world, companies of all sizes are facing strict requirements for transparency and data security. Public companies must ensure that they have strong controls around financial processes. And even private companies are under increased scrutiny from lenders, auditors and investors. A meticulous budgeting and forecasting process is central to the good governance of every company.
Spreadsheet tools were simply not designed for rigorous financial controls. The limited retrofitting that has been done — such as adding passwords to spreadsheets or attempting to limit which portions of a spreadsheet are editable — are the worst kind of half-measure. They do not accurately address compliance issues, but rather make the entire process more cumbersome and difficult for everyone involved.
With spreadsheets, organizations face numerous compliance-related risks, including:
Data security — Because there is little to no security inherent in a spreadsheet model, they make it virtually impossible to ensure that the data has not been tampered with, viewed by unauthorized individuals within the company — or worse — forwarded to others outside the company.
Data inconsistency — Multiple versions of spreadsheets floating around in email make it difficult to ensure that analyses are performed on the most up to date financial plan or forecast.
Audit trails — Spreadsheets lack audit trail capabilities that allow financial managers to see who made changes and when.
The actual challenge of Sarbanes-Oxley is ensuring it is observed and that compliance can be demonstrated and accurately monitored and reported. The most common area of focus is the creation of transparent and auditable systems for recording transactions, dealings and any kind of business correspondence and this is where excel can fail down.
So see what else is out there, check out Forecast Pro and see what it can do for your business and Mr Sarbanes-Oxley