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aff2851 spreadsheet assign

aff2851 spreadsheet assign - Spreadsheet Errors Spreadsheet...

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Spreadsheet Errors Spreadsheet Errors MONASH UNIVERSITY AFF2851 AIS and Financial Modelling Neha Bedi Student Id: 22619445 Tutor: Ian Beaman Tutorial Time: 10:00 AM, Tuesday Since the 20 th century, many companies use spreadsheets such as Microsoft Excel to perform analysis and as decision support tools. Despite numerous efforts to reduce substantial spreadsheet errors in order to minimise losses in business due to incorrect information, there are still chances of having errors in the spreadsheet. The reason for these errors might be simple mistakes or overly complex formulas etc. Therefore, businesses should always have in place some error detection and prevention measures,
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Spreadsheet Errors such as cell protection of formulas and staff training, to avoid distorting the decision making process. It is surprising to know that when examined, Panko (2009) found that 94% spreadsheets have errors and that the average cell error rate is 5.2%. History of risk of errors in spreadsheets Reliance on spreadsheets to make business decisions has been increasing greatly as spreadsheets are known to quickly perform analysis which might otherwise be very time consuming and difficult to prepare. So we place our trust in the accuracy of the analysis. But according to research, there is always a chance of an error which can result in bad decision making and can cause catastrophic losses like Fannie Mae's $1 billion-plus underestimate of total stockholder equity or the cut-and-paste error that caused Canadian power company TransAlta to spend $24 million more than it intended to on hedging contracts. Another business that faced great loss was Fidelity Investments when a tax accountant omitted a minus sign while typing information from the fund's financial records into a separate spreadsheet, turning a $1.3 billion loss into a $1.3 billion gain. Therefore,
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