Professor Ray Panko conducted research on spreadsheet errors by auditing spreadsheets from various organizations. He found that while most spreadsheet errors occur in only a few percent of cells, these errors can be quite costly for organizations. Some common causes of spreadsheet errors include poor design, typos, formula errors, and lack of understanding of inputs and outputs. The most prevalent errors are referencing or linking errors, data quality issues, and logical flaws in reasoning. To prevent errors, organizations should train users, establish documentation and data standards, implement security measures, and check calculations.

1. Spreadsheet Errors Name: Kimberly Trout Date: April 4, 2010

2. 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

3. 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

4. What Are The Most Common Errors? Poor spreadsheet design and layout “ Fat Fingers” or mistyping a number Formula 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

5. What Are The Most Common Errors? Referencing or linking errors Data quality errors Logic errors Use unreliable sources of data from 3 rd 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

6. 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