24.4.05

Managing spreadsheet fraud | The Register

Managing spreadsheet fraud

According to both PricewaterhouseCoopers and KPMG, more than 90 per cent of corporate spreadsheets have material errors in them. Worse, estimates suggest that such errors costs between $10,000 and $100,000 per error per month. Let's take the Fortune 500 and let's suppose that each of these companies has just 10 (a pitifully small number) spreadsheets of corporate significance. Then nine have errors. Let's be circumspect and suppose that each has only one error and that it is spotted within three months (wildly optimistic); then each error costs $165,000 on average.

So how much money is the Fortune 500 wasting annually? It is a simple sum: $165,000 times 9 times 500. That amounts to just shy of three quarters of a billion dollars. And is that anywhere near realistic? No. It is probably safe to say that corporate America, for example, loses in excess of $10bn annually through the misuse and abuse of spreadsheets. That's a big number: it suggests a problem worth managing.

1 comment:

Kirsten said...

my - you've been busy. Missing Isa? : )

(and, only you would notice that the numbers weren't random...)