Spreadsheet Professional Sarbanes Oxley

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Spreadsheet Professional& Sarbanes Oxley

The worlds leadingspreadsheet

development and

testing tool

Contact:

Email: [email protected]

Web site: www.spreadsheetinnovations.com
mailto:[email protected]:[email protected]


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The Sarbanes Oxley act mandates that a report is producedeach year that testifies that adequate internal controls are in

place for financial reporting

Section 404

(a) Rules Required. The Commission shall prescribe rules requiring each

annual report required by section 13(a) or 15(d) of the Securities Exchange Actof 1934 to contain an internal control report, which shall--(1) state the responsibility of management for establishing and maintaining an

adequate internal control structure and procedures for financial reporting; and(2) contain an assessment, as of the end of the most recent fiscal year of the

issuer, of the effectiveness of the internal control structure and procedures ofthe issuer for financial reporting.

(b) Internal Control Evaluation and Reporting. With respect to the internal

control assessment required by subsection (a), each registered publicaccounting firm that prepares or issues the audit report for the issuer shallattest to, and report on, the assessment made by the management of theissuer. An attestation made under this subsection shall be made in accordancewith standards for attestation engagements issued or adopted by the Board.

Any such attestation shall not be the subject of a separate engagement.


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Virtually all (all?) companies use spreadsheets in some part ofthe creation of their published accounts, and these

spreadsheets can contain significant errors

A single wrong figure on a spreadsheet forced Credit Suisse tomarkdown its profits by Swfr 200m (86m).

The error came in the German subsidiary of the banksWinterthur arm, marking an embarrassing first year in charge

for the insurers Lenny Fischer. It means fourth-quarterincome was lowered 16.7% to Swfr 1 billion

London Evening Standard 26th March 2004


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We believe that spreadsheet errors are significantlyunderestimated by the business and IT

community

The European Spreadsheet Risks Group lists 72 publicly reported errors ofupto $1billion due to inadequate spreadsheets and/or spreadsheet controls. http://www.eusprig.org/stories.htm

Both KPMG and Coopers & Lybrand have reported finding error rates of morethan 90% in live spreadsheets.

"KPMG Management Consulting audited spreadsheets from over 21 major UK banking and financialorganisations. 92% of the spreadsheets dealing with tax issues had significant errors, 75% had significant

accounting errors, and 59% were judged to have poor design".

Academic studies (including ones using Spreadsheet Professional) regularlyreport 50% or more of spreadsheets containg code errors.

Our own experience mirrors the above. We are aware of several othersignificant spreadsheet errors that have not been reported in the press.
http://www.eusprig.org/stories.htmhttp://www.eusprig.org/stories.htm


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To meet the requirements of Sarbanes Oxley,therefore, we believe that there are three key

requirements

1. You must know the location of, and be able to control, yourbusiness critical spreadsheets and in particular those used for

the creation of the companies financial results both at thecentre and in your companys operating units.

2. These business critical spreadsheets must becomprehensively tested for errors, and both the spreadsheetsand the tests on the spreadsheets documented to meet the

requirements of SoX.

3. Training must be provided to those people creating and usingbusiness critical spreadsheets.


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To meet these requirements therefore

we believe organisations need

1. A method of control. There are now a variety of vendorsoffering control packages for spreadsheets. we work with a

number of them to ensure compatibility of our products.

2. A method of testing and documenting the criticalspreadsheets. Spreadsheet Professional, created in 1994, isthe most established tool for performing such tests with,currently, 7000 clients worldwide.

3. Training of end users. We have teamed with AuditExcel toproduce video training that can accompany the product toprovide an introduction to spreadsheet best practice.


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Spreadsheet Professional

How it helps meet the Sarbanes OxleyRequirements.


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Spreadsheet Professional has been developed as apowerful testing and documentation tool, following

some key design principles

Design principles

To save the end user time and effort. SP has been designed so that its use saves the end user time, therebyencouraging its use.

To be easy to use It is designed as an addin for Excel driven by standard menus, so that it is familiar to end users.

To not impact on the Spreadsheets tested. SPs testing and documenting tools leave the original spreadsheetunchanged.

To provide evidence of the tests and documentation performed. All tests and documentation are stored in separateworkbooks.

To be compatible with all versions of Excel and to work over a network, thereby easing issues of implementation anddistribution.

Its tools are divided into four sections:

Build tools that encourage the use of spreadsheet design best practice, thereby reducing the probability of an error occurring. Testing tools to aid the identification of errors.

Documentation tools to ensure that the organisation can understand the key assumptions and design of the spreadsheetmodels.

Usage tools to encourage proper use of the spreadsheet models developed.


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The Build tools

- Setting up the spreadsheet correctly

SP is driven by aneasy to use menu

bar.

The Build tools are

designed to

encourage best

practice.


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The Build tools


The standard

format tool

ensures sourcesand units are

included.

The Build bar

enables formatting

and copying to be

performed with a

single key press.


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The Build tools


The colour coding

and formatting

aids

understanding.

The translation bar

provides instant

translation into

English offormulas entered.


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The Build tools

It is possible to apply formatting retrospectively

The spreadsheet

painter enablesyou to colour code

a spreadsheet

after completion.


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Testing toolsThe test tools apply tests against commonerrors

The automated

tests capture manytypical

spreadsheet

errors.


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Testing tools and produce a comprehensive test reportindicating where errors may have occurred.

As well as

providing the list ofcells, SP explains

what to look for.


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Documentation toolsThe tools are designed to provide easy

understanding of a spreadsheet

The summary

report details thesheets used and

basic data about

the spreadsheet.


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Something odd

has happened

here.

The Map report

identifies potential

inconsistencies in

the development

of the

spreadsheet.


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The translation

report translates

each formula intoEnglish for easy

understanding.


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Documentation toolsThe inputs report enables you to check all the

inputs to a spreadsheet against the source data


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Documentation toolsThe formula tracer rapidly aids understanding of a

spreadsheet

Easy to

understand printed

documentation can

be quickly

produced

This has proved

the easiest way to

understand how

formulas are

calculated.


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Usage toolsThe quick reports tool enables reports to be created

very quickly

The quick reports

tool provides an

easy mechanism

for printing out

several reports at

once.


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Usage toolsThe comparison tool enables changes in

spreadsheets to be spotted quickly

The comparison

tool enables you to

check whether two

spreadsheets are

the same, and/orthe differences

between two runs

of the same

spreadsheet.


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Usage toolsThe sensitivity analyser enables you to identify

what drives your results

The sensitivity tool

provides a range

of outputs both

graphical andnumerical showing

how a target cell

varies when

another cell is

changed.


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Usage toolsThe sensitivity analyser and produce written

reports

SP is designed to

provide hard copy

reports of all its

outputs. These

are created as

Excel workbooksso that they can be

added to reports,

distributed

electronically, or

printed out.


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Summary

The worlds leading tool for the production ofprofessional quality spreadsheets.

Ideal for the implementation of appropriate controlsto meet the needs of Sarbanes Oxley.

Designed to radically reduce the time taken to buildand use spreadsheets and at the same timeradically improve their quality.

Impacts all aspects of the Spreadsheet design, build,document, test and use.

Pays for itself the first time it is used.


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Training

Whatever controls are implemented, we believe that

the success of the implementation will be enhanced

through the provision of end user training.

We have teamed with Audit Excel to provide a

multimedia training package that can accompany

Spreadsheet Professional.


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The course consists of an introduction to using

Excel

Introduction (2 min)

Brief introduction to the topic and using this training course

Auditing Toolbar(5 min)

Loading and using the auditing toolbar which is a fundamental tool in Excel

1- Auditing Toolbar exercise

Load the auditing toolbar and see how it helps to find errors in the spreadsheet.

Solution included in exercise

How Errors Happen

It is extremely easy to make errors in a spreadsheet. Below are some of the typical errors made. Look through the items you are familiar with:

Basic Functions

Copy and Paste (2 min)

Inserting Rows (2 min)

Inserting cells (1 min)

Deleting cells (1 min)

Hiding rows or columns of information (2min)Linking spreadsheets together(3 min)

Intermediate and advanced functions

IF functions (e.g. SUMIF) (3 min)

VLOOKUP function (5 min)

MIN and MAX functions (2 min)

Referencing (absolute and relative) (2 min)

2- How errors happen

Work through each example of the functions you use. When you get to the external links example open the following workbook.

3- More than one workbook

Work through the example to see what goes wrong when you work across workbooks.
http://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Introduction%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/AuditToolbar%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Auditing%20Toolbarhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/CopyPaste%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Insert%20Row%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Insert%20Cell%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Delete%20Cell%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Hidden%20Cells%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Linked%20Sheets%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/SUMIF%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Lookup%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/MinMax%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Referencing%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/How%20Errors%20Happenhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/How%20Errors%20Happenhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/How%20Errors%20Happenhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/How%20Errors%20Happenhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/How%20Errors%20Happenhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Referencing%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/MinMax%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Lookup%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/SUMIF%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Linked%20Sheets%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Hidden%20Cells%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Delete%20Cell%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Insert%20Cell%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Insert%20Row%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/CopyPaste%20I%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Auditing%20Toolbarhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Auditing%20Toolbarhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Auditing%20Toolbarhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Auditing%20Toolbarhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/AuditToolbar%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Introduction%20Project.wmv


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a comprehensive guide to how to use SpreadsheetProfessional to review spreadsheets (this is just some of the

sections)

Getting Started with Spreadsheet Professional (3min)

An introduction to Spreadsheet Professional ("SP") and the objectives of this part of the course

Change the options as indicated in the introduction video. You can stop/ start the video to follow the precise steps.

4- Feedback template

A template to use when documenting a review. Use it for the upcoming exercises.

The Spreadsheet Model review process (3 min)

A high level overview of the spreadsheet review process and how spreadsheet professional assists in the task.

A print out of the spreadsheet review process

Maps (4 min)

How to use the Maps feature in SP.

5- Maps exercise

Run the maps on the 2 sheets in this workbook. Review the maps and look at the inconsistent areas. Document your findings on the feedback template. Tick

off the formula that you have looked at on the map.

6-What your map should look like and where you should lookHighlighted in red are the areas you should have reviewed and documented on the Feedback Template.

Prioritising the cells you look at (7 min)

Which cells to look at first to find the errors

7-Priority Exercise

Run the test reports on the 2 sheets in this workbook. Review the report and look at the inconsistent areas. Document your findings on the feedback

template. Tick off the formulae you look at on the maps.

8- What your report should look like

What your report should look like.

9- Suggested findings after exercises

After reviewing the maps and reports you should have found most of these.
http://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/SP%20Introduction%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Introhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/SP%20Preview%20and%20Objectives.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Maps%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Mapshttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/SP%20Priority%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Prioritieshttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Prioritieshttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Prioritieshttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Prioritieshttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/SP%20Priority%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Mapshttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Mapshttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Mapshttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Mapshttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Maps%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/SP%20Preview%20and%20Objectives.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Introhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Introhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Introhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Spreadsheet%20Professional%20Introhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/SP%20Introduction%20Project.wmv


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and a section on Spreadsheet design and

advanced features of Excel

Good Spreadsheet Design (15 min)

Basic concepts in designing spreadsheet models.

External Links (5 min)

Handle links between spreadsheets using Excels inbuilt features.

21- External links exercise

22- Input Data v1

23- Input Data v2

Open these 3 files, view the external links and make the changes.

Find/ Replace (9 min)

Use this common Excel feature to help in reviews and find cells containing external links.

Use the files for the external links and find the stray link.

The GoTo Special Command (7 min)Learn how to use this brilliant tool to navigate your spreadsheet.

24- GoTo Special Exercise

Follow the instructions in the file.

The Function Wizard (3 min)

See what is already built into Excel.

25- Function Wizard Exercise

Follow the instructions in the exercise
http://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Good%20Spread%20Design%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/External%20Links%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/External%20Linkshttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/FindReplace%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/GoTo%20Special%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/GoTo%20Specialhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Function%20Wizard%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Functionhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Functionhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Functionhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Functionhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/Functionhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Function%20Wizard%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/GoTo%20Specialhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/GoTo%20Specialhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/GoTo%20Specialhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/GoTo%20Specialhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/GoTo%20Special%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/FindReplace%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/External%20Linkshttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/External%20Linkshttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/External%20Linkshttp://localhost/var/www/apps/conversion/tmp/scratch_14/Example%20Files/External%20Linkshttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/External%20Links%20Project.wmvhttp://localhost/var/www/apps/conversion/tmp/scratch_14/WMP%20Files/Good%20Spread%20Design%20Project.wmv


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each section consists of video clips,

exercises and worked examples

Click on the picture to

see an example video

clip.


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Next steps and any questions

Spreadsheet Professional Sarbanes Oxley

Documents

Transcript of Spreadsheet Professional Sarbanes Oxley