Software for consolidating financial statements

15 Jan

From an internal control perspective, this is a dangerous practice.The problem is not just that the spreadsheets are flawed—one study found that 94% of spreadsheets have errors—but that they lack the proper risk-mitigating controls, which should be a major concern for those using spreadsheets in accounting and finance functions.Also post the depreciation, amortization or revaluation values for the non-current assets."Depreciation" is the reduced value over time of tangible assets, while "amortization" is the reduced value over time of intangible assets.Not taking one of these steps is leaving too much to chance.Invariably, sooner or later, it will result in material misstatements in critical financial statements.This accounting software program is suitable for small businesses such as restaurants, retailers, distributors and brokerage agencies that have separate units employing between 10 to 50 employees.Consolidation of financial statements is a requirement of the IAS 27 of the International Financial Reporting Standards.

If your organization still relies on financial statements consolidated using a spreadsheet, take another close look at the process and either introduce a well documented and periodically tested set of internal controls over the design, use and change management of this process, or better still, perform it in a purpose-built application.

To read more of Alan’s thoughts on budgeting and forecasting, visit

If you plan to try and account for revenue recognition (Rev Rec) under the new accounting standards ASC 605 and ASC 606/IFRS 15 using a spreadsheet, be aware that this is going to introduce more complexity to your financial processes, not less.

While these individuals have the necessary skills to design and implement them, they almost never think of reviewing them for accuracy or completeness of formulas, functions, links and any programming code.

Of the handful of spreadsheets that are looked at in more detail, they are usually reviewed by their own authors and are almost never subject to a peer review, or by someone completely independent.