Big4Guy

All companies user spreadsheets in one form or the other. In many cases,
financial data such a balance sheet and financial formulas are stored in spreadsheets. This makes it imperative to have adequate controls surrounding spreadsheets. Spreadsheet controls are similar to other internal controls in a way that they require that appropriate process is documented and followed for managing spreadsheets. Moreover, Sarbanes Oxley requires that controls be placed only on significant spreadsheets and not all spreadsheets.

This presents a dilemma to many companies as to what constitutes a significant spreadsheet. Significant spreadsheets are those which fulfill any one or both of the criteria listed below.

1. Spreadsheets used to calculate financial data which is used in financial reporting.

2. Spreadsheets that contain sensitive financial information or are used to transmit confidential business information.

So in evaluating whether a spreadsheet is a significant spreadsheet for
Sarbanes Oxley compliance, ask yourself the above two questions. If the answer to any one of the questions is a 'yes', then the spreadsheet is a significant spreadsheet. Once a spreadsheet has been identified as a significant spreadsheet, certain set of controls need to be applied to such spreadsheets. You can read more on controls for significant spreadsheets here.

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