Managing change risk in Excel spreadsheets

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This slide describes a method by which spreadsheet changes can be automatically assessed for risk

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  • If this presentation is designed to feature and sell a 'solution', it misses two key opportunities. First, it should have referenced, and tied its features and capabilities to, the 2006 study by PWC which outlines the framework for spreadsheet control as it, and others, proposed to COSO for incoporation into SOX. Second, it would also have been helpful for the author(s) to describe how its 'solution' works with, and perhaps improves, the activity audit, change management, and control tools that are already designed into Excel.
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Managing change risk in Excel spreadsheets

  1. Quantifying risk in Excel spreadsheet changes<br />DiffXL<br />
  2. By their very nature, spreadsheets change<br />
  3. Change matters<br />
  4. But who cares about spreadsheet change?<br />
  5. Spreadsheet owners & risk managers<br />
  6. Internal & external auditors<br />
  7. Mike Oxley<br />Paul Sarbanes<br />
  8. How do companies deal with spreadsheet change?<br />
  9. In a perfect world …<br />
  10. Every spreadsheet would be audited<br />and all risks would be mitigated<br />
  11. What do real-worldmanagers say about spreadsheet changes?<br />
  12. What do real-worldmanagers say about spreadsheet changes?<br />We would obviously test and document any changes – But we haven’t amended anything this year.<br />We always check the changes before release, but they’re not major enough to change the documentation<br />
  13. What happens when we talk to real-worldauditors about spreadsheet auditing?<br />
  14. What happens when we talk to real-worldauditors about spreadsheet auditing?<br />We’ll always check the high risk spreadsheets, but the rest tend to get ignored – We’ll do them all some day.<br />Realistically, we’d probably expect some smallunexplained variations in the final results <br />
  15. The result?<br />
  16. Everything’s fine, boss<br />
  17. … yes, just fine<br />
  18. Is this how you see a spreadsheet?<br />
  19. This is how DiffXL sees a spreadsheet<br />
  20. Formula maps<br />A visual representation of a spreadsheet<br />Standard spreadsheet view<br />Formula view<br />(R1C1 style, available in Excel)<br />Formula map view<br />(as processed by a formula map tool)<br />
  21. Examples of changes to the shape& colourof a formula map<br />
  22. Original view<br />(Formula map version)<br />
  23. Original view<br />(Formula map version)<br />
  24. Original view<br />(Formula map version)<br />Column added<br />with new text and formula<br />
  25. Original view<br />(Formula map version)<br />
  26. Original view<br />(Formula map version)<br />Region extended, one text cell and one new formula added at the bottom<br />
  27. Some changes offer little genuine risk<br />
  28. Original view<br />(Formula map version)<br />
  29. Original view<br />(Formula map version)<br />Entire region moved and text entered in cell B2<br />
  30. Others give cause for concern<br />
  31. Original view<br />(Formula map version)<br />
  32. Original view<br />(Formula map version)<br />Text overwrites formula in C5, new formula in cell E5<br />
  33. DiffXL also stores some other basicdata about the structure. Altogether this means it can ascertain data and formula ranges that have been …<br />Changed, Combined, Created, Deleted, Extended, Moved, Overwritten, Shrunk, Sorted or Split<br />
  34. DiffXL<br />
  35. DiffXL<br />Considers a spreadsheet as a set of contiguous coloured rectangles<br />
  36. DiffXL<br />Considers a spreadsheet as a set of contiguous coloured rectangles<br />Looks at how the shapes & colours change<br />
  37. DiffXL<br />Considers a spreadsheet as a set of contiguous coloured rectangles<br />Looks at how the shapes & colours change<br />And assigns the spreadsheet an appropriate change-risk metric<br />
  38. Why measure risk and not just change? <br />
  39. Because when we understand the true<br />Risk<br />we can assign the<br />most appropriate<br />Effort<br />to minimize the overall<br />Cost<br />
  40. ... and so concentrate on the things that really matter<br />
  41. DiffXL analysis can be run ….<br />
  42. DiffXL analysis can be run ….<br />Automatically during a file save or publish (SharePoint)<br />
  43. DiffXL analysis can be run ….<br />Automatically during a file save or publish (SharePoint)<br />As part of a monthly, quarterly or yearly checking process (Excel or SharePoint)<br />
  44. DiffXL analysis can be run ….<br />Automatically during a file save or publish (SharePoint)<br />As part of a monthly, quarterly or yearly checking process (Excel or SharePoint)<br />Manually in Excel by a user, manager or auditor<br />
  45. How can DiffXL help<br />auditors?<br />
  46. It can be run quickly and simply against every important spreadsheet<br />
  47. It identifies spreadsheets where the underlying data has changed<br />
  48. It highlights spreadsheets whose calculation methods have been modified<br />
  49. It can spot spreadsheets that are fundamentally the same<br />
  50. How can DiffXL help<br />departmental & risk managers?<br />
  51. It can identify spreadsheets that have been changed accidentally<br />
  52. It can isolate spreadsheets that require re-documenting or re-testing<br />
  53. It can recognize a spreadsheet<br />in need of attention<br />
  54. ... and it can be used to locate issues pro-actively, allowing managers to resolve problems at a convenient time before audit.<br />
  55. Plus, there’s a little benefit on the side …<br />
  56. Happy users!<br />
  57. Happy users!<br />Why so?<br />
  58. They can demonstrate that their changes are of little risk<br />
  59. Restrictive or time consuming change procedures can be targeted towards high risk changes<br />
  60. They can identify any high-risk changes themselves<br />… and mitigate them if required<br />
  61. So where does that leave companies using a DiffXL approach to spreadsheet change?<br />
  62. Informed managers<br />DiffXL<br />
  63. Informed managers<br />Satisfied auditors<br />DiffXL<br />
  64. Informed managers<br />Satisfied auditors<br />Happy users <br />DiffXL<br />
  65. Beautiful <br />
  66. Excel & SharePoint are registered trademarks of Microsoft Corporation.<br />DiffXL is a registered trademark of ExcelforManagers.com.<br />Copyright 2009 Excel For Managers. All rights reserved.<br />

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