Spreadsheet Errors

Name: Kimberly Trout

Date: April 4, 2010

Are Spreadsheet Errors A Big Deal?

Professor Ray Panko, at the University of Hawaii, pulled together the available evidence from field audits of spreadsheets.

YES!

Although most spreadsheet errors occur in a few percent of cells, these errors can be quite costly for organizations

Study No. Sheets No. Errors % Errors

Coopers & Lybrand, 1997 23 21 91%

KPMG, 1997 22 20 91%

Lukasic, 1998 2 2 100%

Butler (HMCE), 2000 7 6 86%

Total 54 49 91%

Why Are Errors So Prevalent?

We work amazingly fast and don’t catch all of our errors

We multitask while we work and often get distracted by other things

We are overly confident of our abilities and don’t like to admit our mistakes

We are afraid to ask for help for one reason or another

What Are The Most Common Errors?

Poor spreadsheet design and layout

“Fat Fingers” or mistyping a numberFormula errors

A specific kind of typo where one stroke presses two keys instead of the intended one

Type “189” instead of “18”

Type “100” instead of “10”

Forget to sum all relevant rows when new rows are inserted into a table

Make symbol errors in a formula (e.g. use addition sign instead of subtraction sign)

A #VALUE error occurs when you try to do a calculation on something that is not numeric

No clear, logical flow of data Multiple charts and tables

with no clear understanding of inputs and outputs

Random highlighting with no clear emphasis on the main focus of the spreadsheet

What Are The Most Common Errors?

Referencing or linking errors Data quality errorsLogic errors

Use unreliable sources of data from 3rd party sources

Lack of data standardization between applications or businesses

Uncontrolled application proliferation

Systems management gaps Enter wrong formula because

of mistakes in reasoning

Create incorrect linkages between cells because of incorrect assumptions

Fail to recognize errors in spreadsheet because the spreadsheet results are in line with your reasoning

Reference the wrong cell to calculate a number (click Mkt Size instead of Revenue to calculate Revenue)

Delete cells that link to other cells in the spreadsheet

Links do not pick up all of the relevant data/cells to make the necessary calculations

How Can These Errors Be Prevented?

Train users how to use

spreadsheets

Set documentation

standards

Establish data entry procedures

Use good security measures

Back data up frequently

Ballpark figures to check data