Financial Exec's Worried About The Numbers
In late 2018, Blackline, a provider of cloud-based products for accounting and finance applications, commissioned a survey of corporate executives and financial professionals. The purpose of the survey was to gauge confidence levels in financial data and the perceived impact of errors on businesses.
A summary of the responses included the following:
- 70% had made decisions based on inaccurate data.
- Over half (55%) said they weren’t confident they could identify errors before the results are reported.
- 71% of the C-level respondents claimed to completely trust the accuracy of financial data. However, only 38% of the financial professionals had the same conclusion.
The major causes cited for inaccurate data were: human error (41%), multiple data sources (40%), lack of automated controls (28%), and outdated spreadsheets and processes (28%). Virtually everyone agreed that the result of unidentified errors is negative. Negative effects included:
- Reputational damage.
- Adversely impact ability to secure more investment or debt financing.
- Possible fines and jail time (one-third of the respondents).
On a positive note, respondents noted efforts to reduce inaccuracies by implementing new technology to mitigate risk, revamping internal and external audit processes, and changing their companies’ reporting processes. Beneficial effects of financial automation are that it forces accountability by maintaining a complete audit trail, and it enforces segregation of duties, so that one user can’t perform both a preparer and a reviewer function.
The Blackline survey was conducted in August and September, 2018, focusing on midsized and large organizations. It included 579 C-level and 575 financial professional in the US, U.K., France, Germany, Australia, Hong Kong, and Singapore.