Excel Not a Reliable Software for Accounting
In 1,987 working with my father at his office, it was available pencils, papers and a printing calculator for accounting and that took forever. Then computers were implemented, and Excel made accounting easy. Still Excel needs for the user to create spreadsheets required for accounting. Accounting had evolved in the last years from manual to computerized systems. The use of Excel, which is considered a manual system in business, is not reliable for real financial statements. Nowadays, financial statements require accurate information for managerial accounting and Excel is not one hundred percent efficient. The software allows mistakes, provides manipulation of the accounts and makes it difficult …show more content…
However, most unethical managers take advantage of the situation and prefer accounting complexity for financial analysis and reports in the enterprise. Peterson (2012) mentions that accounting complexity “with more complexity leading to more errors and misreporting.”(p. 76). Those inconsistences are used by managers as excuse in case of an audit. Moreover, accounting complexity not only increases the probability of errors, but it also increases the risk of managers hiding accounts and manipulating interest rates to confuse owners or stockholders with the results.
The recommendation to prevent that activity is to perform once or twice a year periodic audits. These inspections will give the owners or shareholder the real financial health of the company. However, it is crucial that an outside company perform the audits which will not have any conflict of interest.
Recently, most of the fraudulent activities in enterprises reported are by the use of Excel. That fraud can be possible because employees can take advantage of Excel. For example, they will not record in the account inventory sales of an item, and the employee will keep the money. Also, the person in charge of purchases in the company can pay fake orders and keep the money for …show more content…
One of the vendors bribes the manager of the purchasing department from the State Department of Natural Resources. The seller, in the beginning, gave him money to secure the purchase. Eventually, the vendor stops sending the supplies and still getting paid, and only after four years that the manager had to take medical leave, they discover the fraud. Also, Kramer (2009) mentions “Preventative controls are critical to eliminating from the fraudster 's mind the idea that there is an opportunity to commit a crime and remain undetected.” (Kramer, 2009, p. 15). Once again it is crucial have internal controls in the company, which Excel does not help much with that. It is incredible how many frauds in businesses have been happening for years. Many years ago working at a Casino in Peru, the president of the tip Committee using Excel in distributing the money collected every week. He was stealing money for years in combination with cashiers. They altered the receipts for the money deposit every day. Also, he manipulated formulas, which will transferred the cents for every pay check to his
In 1,987 working with my father at his office, it was available pencils, papers and a printing calculator for accounting and that took forever. Then computers were implemented, and Excel made accounting easy. Still Excel needs for the user to create spreadsheets required for accounting. Accounting had evolved in the last years from manual to computerized systems. The use of Excel, which is considered a manual system in business, is not reliable for real financial statements. Nowadays, financial statements require accurate information for managerial accounting and Excel is not one hundred percent efficient. The software allows mistakes, provides manipulation of the accounts and makes it difficult …show more content…
However, most unethical managers take advantage of the situation and prefer accounting complexity for financial analysis and reports in the enterprise. Peterson (2012) mentions that accounting complexity “with more complexity leading to more errors and misreporting.”(p. 76). Those inconsistences are used by managers as excuse in case of an audit. Moreover, accounting complexity not only increases the probability of errors, but it also increases the risk of managers hiding accounts and manipulating interest rates to confuse owners or stockholders with the results.
The recommendation to prevent that activity is to perform once or twice a year periodic audits. These inspections will give the owners or shareholder the real financial health of the company. However, it is crucial that an outside company perform the audits which will not have any conflict of interest.
Recently, most of the fraudulent activities in enterprises reported are by the use of Excel. That fraud can be possible because employees can take advantage of Excel. For example, they will not record in the account inventory sales of an item, and the employee will keep the money. Also, the person in charge of purchases in the company can pay fake orders and keep the money for …show more content…
One of the vendors bribes the manager of the purchasing department from the State Department of Natural Resources. The seller, in the beginning, gave him money to secure the purchase. Eventually, the vendor stops sending the supplies and still getting paid, and only after four years that the manager had to take medical leave, they discover the fraud. Also, Kramer (2009) mentions “Preventative controls are critical to eliminating from the fraudster 's mind the idea that there is an opportunity to commit a crime and remain undetected.” (Kramer, 2009, p. 15). Once again it is crucial have internal controls in the company, which Excel does not help much with that. It is incredible how many frauds in businesses have been happening for years. Many years ago working at a Casino in Peru, the president of the tip Committee using Excel in distributing the money collected every week. He was stealing money for years in combination with cashiers. They altered the receipts for the money deposit every day. Also, he manipulated formulas, which will transferred the cents for every pay check to his