The research, The Future of Financial Reporting 2017, was conducted by survey company, FSN, on behalf of BOARD International. The results are based on a survey of 977 finance professionals across 23 countries including the Asia Pacific region.

The survey of senior finance professionals found 55% of professionals were worried their internal controls were not working effectively during their reporting period. A further 46% were concerned about unexpected errors being identified in critical spreadsheets while 40% did not believe their data was always trustworthy and accurate.

Mark Sands, general manager Asia Pacific, BOARD International, said, "The results are very concerning and should be a wake-up call for Australian companies. If boards are being provided with incomplete or inaccurate financial information it could be compromising their ability to make key management decisions."

When asked about the financial processes within their organisation, more than 50% of respondents admitted their reporting processes involve huge amounts of manual checking each time a change is made. The survey also found 60% feel they spend too much time cleaning and manipulating data.

"Clearly, despite significant investments in information technology, there is still a wide gulf between what is achievable and what is happening within many large organisations," said Sands.

"Only 46% of survey respondents said they could easily accommodate changes in information requirements and just 34% said they could make changes without relying on the IT department.”

Spreadsheet reliance – spreadsheet hell

The survey found many finance departments were still heavily reliant on multiple spreadsheets to create required reports for senior management. These spreadsheets were often unconnected, meaning that significant manual data manipulation was required as part of ongoing workflows.

A total of 71% said they depended on spreadsheets for collecting data across their majority of their business units. Worryingly, 66% admitted that, when gaps were discovered in their reporting processes, they used spreadsheets to plaster them over.

"Spreadsheets can be powerful tools, but they are not designed to be at the core of the financial reporting process. Such high dependence risks an organisation falling into a spreadsheet spiral which reduces efficiency and results in lower-quality reporting,” Sands said.

Unexpected error anxiety

Corporate reporting is not a static activity with changing regulatory requirements and an abundance of new data having an ongoing impact on the accuracy and efficacy of reports.

The survey found 90% of finance executives were worried about at least two financial reporting concerns. In some cases, these concerns were part of a larger pool of misgivings and process failures indicative of a malaise in their entire financial report system.

"We found that 62% of respondents are worried about missing reporting deadlines due to the cumbersome systems and processes they have in place. Of this group, 93% lack the confidence that the controls they have were working properly during the reporting period,” said Sands.

A unified environment

The survey clearly showed significant changes to data management and reporting processes were required within many large organisations. A unified environment needed to be created that centralised all relevant data and provided access to users in an efficient manner.

"This doesn't mean that all spreadsheets should be discarded However, it does mean developing a central data repository from which reports can be generated as required,” Sands said. 

He said the implementation of effective corporate performance management tools would achieve this goal. These tools could ensure all stakeholders in the company could readily input data, establish its veracity, and generate timely reports.

"Investing in a unified processing tool will ensure the finance department is better placed to deliver the reports and insights required by senior management. The days of being stuck in a spreadsheet spiral will be over."