ICAEW recognises the FAST Standard

FINANCIAL MODELLING - FAST STANDARD

Author:

Kenny Whitelaw-Jones

Published:

24 Jun 2014

Comments:

0 Comments

Category:

Last week in London the Institute of Chartered Accountants in England and Wales (ICAEW) launched their Twenty principles for good spreadsheet practice. In this document the ICAEW recommend that organisations adopt a standard. As one of the member firms of the FAST Standard Organisation were delighted that the ICAEW also officially recognised the FAST Standard in their document.

This short film, sponsored by the FAST Standard Organisation, gives you an overview of the event and an introduction to the ICAEW principles.

The ICAEW made this statement on their website, “Businesses of all shapes and sizes are very heavy users of spreadsheets, and in some cases key business decisions costing millions of pounds rest on spreadsheet modelling. Yet studies suggest that 90% of them contain mistakes.

It isn’t just the headline-grabbing high profile errors. Smaller businesses also lose money, not only through errors but also through sheer inefficiency caused by poorly designed spreadsheets that lack such basics as integrity checks and documentation. Use of these principles will help organisations reduce risk and improve efficiency of spreadsheet use, saving valuable time and money.”

The 20 principles for good spreadsheet practice are below:

The spreadsheet’s business environment
1. Determine what role spreadsheets play in your business, and plan your spreadsheet standards and processes accordingly.
2. Adopt a standard for your organisation and stick to it.
3. Ensure that everyone involved in the creation or use of spreadsheets has an appropriate level of knowledge and competence.
4. Work collaboratively, share ownership, peer review.

Designing and building your spreadsheet
5. Before starting, satisfy yourself that a spreadsheet is the appropriate tool for the job.
6. Identify the audience. If a spreadsheet is intended to be understood and used by others, the design should facilitate this.
7. Include an ‘About’ or ‘Welcome’ sheet to document the spreadsheet.
8. Design for longevity.
9. Focus on the required outputs.
10. Separate and clearly identify inputs, workings and outputs.
11. Be consistent in structure.
12. Be consistent in the use of formulae.
13. Keep formulae short and simple.
14. Never embed in a formula anything that might change or need to be changed.
15. Perform a calculation once and then refer back to that calculation.
16. Avoid using advanced features where simpler features could achieve the same result.

Spreadsheet risks and controls
17. Have a system of backup and version control, which should be applied consistently within an organisation.
18. Rigorously test the workbook.
19. Build in checks, controls and alerts from the outset and during the course of spreadsheet design.
20. Protect parts of the workbook that are not supposed to be changed by users.

We are delighted that the FAST Standard has received this recognition and hope you enjoy our coverage of the event.

To find out more about the FAST standard visit www.fast-standard.org

To download our How to standardise modelling ebook, click the link below.



How to standardise modelling ebook




Avatar
Kenny Whitelaw-Jones
Kenny Whitelaw-Jones is no longer with F1F9 but we really like this blog so we've kept it.