A company's finance function uses a spreadsheet instead of a purpose-built system for its financial reporting. Which risk is most significant?
Answer and explanation
Correct answer: C. A higher risk of formula errors and weaker control over changes
- Step 1: Spreadsheets give flexibility but have weaker built-in controls.
- Step 2: Formulas can be overwritten and versions can differ, creating a risk of undetected errors.
Answer
A higher risk of formula errors and weaker control over changes.
Why not the others: Spreadsheets can calculate, but the risk is in control. Spreadsheets generally have more risk of error. The data will be impossible to back up: Spreadsheets can be backed up, though controls vary.
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