Editing Spreadsheet (section)

== Spreadsheet risk ==
{{further|Financial modeling#Accounting}}
Spreadsheet risk is the risk associated with deriving a materially incorrect value from a spreadsheet application that will be utilized in making a related (usually numerically based) decision. Examples include the valuation of an [[asset]], the determination of [[Financial accountancy|financial accounts]], the calculation of medicinal doses, or the size of a load-bearing beam for structural engineering. The [[risk]] may arise from inputting erroneous or fraudulent data values, from mistakes (or incorrect changes) within the logic of the spreadsheet or the omission of relevant updates (e.g., out of date [[exchange rates]]). Some single-instance errors have exceeded US$1&nbsp;billion.<ref>{{cite web |url= http://www.accessanalytic.com.au/Spreadsheet-Auditing.html|title= Excel Financial Model Auditing |access-date=20 February 2013}}</ref><ref>{{cite news |title= Fannie Mae Corrects Mistakes In Results|author= Jonathan Glater|url= https://www.nytimes.com/2003/10/30/business/fannie-mae-corrects-mistakes-in-results.html|newspaper= The New York Times|date= 30 October 2003|access-date=12 June 2012}}</ref> Because spreadsheet risk is principally linked to the actions (or inaction) of individuals it is defined as a sub-category of [[operational risk]].

Despite this, research<ref name="Financial Times">{{cite news|url=http://www.ft.com/cms/s/0/60cea058-778b-11e2-9e6e-00144feabdc0.html#axzz2YaLVTi2m |archive-url=https://ghostarchive.org/archive/gDVSj |archive-date=2022-12-10 |url-access=subscription|title=Finance groups lack spreadsheet controls|author =Financial Times|newspaper=Financial Times|date=18 March 2013}}</ref> carried out by ClusterSeven revealed that around half (48%) of [[c-level executive]]s and senior managers at firms reporting annual revenues over £50m said there were either no usage controls at all or poorly applied manual processes over the use of spreadsheets at the firms.<ref name="Financial Times" /><ref>{{cite web|url=https://www.theguardian.com/media-network/media-network-blog/2013/apr/04/spreadsheet-risk-cyber-threat-finance|title=Spreadsheet risk and the threat of cyber attacks in finance|author =The Guardian|website=[[TheGuardian.com]]|date=4 April 2013}}</ref>

In 2013 [[Thomas Herndon]], a graduate student of economics at the [[University of Massachusetts Amherst]] found major coding flaws in the spreadsheet used by the economists [[Carmen Reinhart]] and [[Kenneth Rogoff]] in ''[[Growth in a Time of Debt]]'', a very influential 2010 journal article. The Reinhart and Rogoff article was widely used as justification to drive 2010–2013 European austerity programs.<ref>{{cite web|url=http://chronicle.com/article/UMass-Graduate-Student-Talks/138763/|title=They Said at First That They Hadn't Made a Spreadsheet Error, When They Had'|newspaper= The Chronicle Of Higher Education|date=24 April 2013}}</ref>