Widespread Use of Spreadsheets for Revenue Reporting Linked to Likelihood of Compliance Failures
A recent survey of financial executives revealed 92 percent of all public companies use spreadsheets for critical accounting activities in their revenue reporting processes, increasing the likelihood of compliance failures and financial restatements. The research, conducted by www.RevenueRecognition.com and IDC and sponsored by Softrax Corp., involved 685 companies and is available in a new report: "Enterprise Systems and Revenue Recognition: The Missing Link".
Revenue Spreadsheets: The Compliance Killers
The reason for widespread spreadsheet use is that key revenue recognition and reporting tasks are still not automated in Financial/ERP systems. Only 8 percent of all responding companies report that they are able to complete their revenue reporting process without having to take data offline and into spreadsheets. The rest of the surveyed companies use spreadsheets, which are prone to errors, lack audit capabilities and resist internal controls. These results should be a concern for corporate finance departments, executives, and investors and auditors alike, because the risks introduced by spreadsheets go against basic compliance principles.
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