The Startling Reality of Errors of Accounting: Why They Happen and How to Preven

1. About Us • Established in 1988, CIMCON Software, LLC is a pioneer in end-user computing and model risk management, serving over 800 companies across industries. Recognized by Gartner, Insurance ERM, and others as a top risk management vendor, CIMCON brings 25+ years of experience and industry best practices to support AI & GenAI readiness and governance. With the largest global installed base, our feature-rich, extensively tested solutions offer unmatched depth, support, and reliability.

2. Errors of accountingare comparable to weeds in a garden—easy to overlook but potentially disastrous if left unattended. • The majority of accounting tasks are completed through spreadsheets, and it’s startling to know that 90% of spreadsheets with over 150 rows contain errors of accounting. • Even seasoned professionals can only spot around 54% of these errors on average. These errors can originate from data entry, flawed formulas, spreadsheet logic, or even incorrect links to other data sources.

3. Why Accounting Errors Are Common Several key reasons account for the high frequency of errors of accounting: – Poor Version and Change Control: When multiple individuals work on the same spreadsheet, the most current version can get lost in the shuffle, leading to errors of accounting. – Lack of Proper Documentation: Without adequate documentation, errors of accounting can remain undetected or misunderstood, making them difficult to rectify. – Insecure Access: Unrestricted access to spreadsheets increases the risk of unintentional or even malicious changes, leading to more errors of accounting.

4. How to Solve This Problem Mitigating the risk of errors of accounting is achievable through our suite of solutions: • Control user access to spreadsheets. • Implement rule-based workflows. • Automated inventory of all End User Computing (EUC) items. • Detailed risk assessment for each EUC. • Implement version control with cell-level audit trails. • Error-check and comprehensive documentation.

5. Accelerate reviews with workflow-based alerts. These features directly tackle the common causes of accounting errors, offering a robust preventive mechanism.

6. The Severe Risks Associated with Errors of Accounting Ignoring errors of accounting can lead to far-reaching consequences such as: • Financial Loss: A simple accounting error can lead to financial setbacks and affect stock value. • Reputation and Market Share: Errors can damage your reputation, leading to loss of market share. • Vulnerability to Fraud: Errors create vulnerabilities that are prone to fraudulent activities. • Cost of Auditing: Errors lead to increased scrutiny and thereby increased costs for auditing and compliance. • Regulatory Fines: Non-compliance can result in hefty fines and legal ramifications.

7. Loss of Job: Consistent errors can lead to job losses across different management levels. Being aware of these risks emphasizes the need for proactive measures to prevent errors of accounting.

8. Contact Us Boston (Corporate Office) +1 (978) 692-9868 234 Littleton Road Westford, MA 01886, USA New York +1 (978) 496 7230 394 Broadway New York, NY 10013

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