Risk abounds in business. As the recent series of CGMA outputs highlight not identifying or mitigating risk in your business can have serious repercussions.
Many actions, not well thought through and "ethics- checked" can come and bite you and your bottom line hard. By "ethics checked", I mean thinking through potential fall out, knowing what are wider concerns and impacts and applying objectivity. And then there's that key issue of being material. For professional accountants integrity is key and work should not contain statements furnished recklessly, or omitting or obscuring information that may be misleading.
Now, sometimes, there may not be intent to do wrong. Mistakes can happen. But avoiding them is part of being a professional. Processes may fall down, checks may not be made, work is too rushed, supervision and support not adequate, questions have not been asked, pressures from above too hard and then the errors slip in. The wrong coding is used, the wrong number tapped in. The wrong data drawn on. And KABOOM.
In between the endless updates of the royal birth this week (a new prince has arrived, he is called George in case you didn't know - let me know if you didn't - you may make the news) the UK national news radio show Today highlighted a new e -book on the 14 worst financial mistakes made by private companies and government departments. F1F9,the company behind the book "the Dirty Dozen" explained the mistakes which originated in the spread sheets. Wow - some big mistakes. With a heavy price tag and fall out.
Like MI5, the British intelligence agency, phone tapping the wrong phones, due to wrong formatted numbers. Or costs to the UK taxpayer of circa UK£50M due to mistakes in the Department of Transport's franchise assessment model for the West Coast Main Line. Or AXA Rosenberg not declaring a spreadsheet error caused an over-estimate of client investment losses leading to a fine of US$242M.
As F1F9 highlight these problems can be widespread and they claim that close to 90% of spreadsheets contain errors, and approximately 50% of spreadsheet models in use operationally in large businesses may have material defects. If you have concerns re you and your team's abilities to provide accurate information via your sheets and feel you face a lack of support in rectifying the situation - now's the time to make the business case to your boss. Or pehaps wait and see what horrors emerge. Believe - me - management will act then! As the reputation fall out will demand it.