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  • Writer's pictureDaniel Goelzer

Your Controller is Probably Making Lots of Accounting Mistakes

A survey of corporate controller employees by consulting firm Gartner found that 18 percent of accountants make financial errors at least daily, a third make at least a few errors every week, and 59 percent make several errors per month.  According to Gartner’s February 21 press release, the firm surveyed 497 individuals working in the controllership function and asked how often they or their peers made common errors “such as those due to manual work, automation, those made by other internal business partners, insufficient review, reopening books, misinterpretation, or volume/complexity overload.” 

Gartner found that errors were “closely linked” to inadequate capacity (i.e., staffing).  Mallory Barg Bulman, senior director, research in the Gartner Finance practice stated:

“While capacity issues aren’t new to accounting, demands on accounting staff capacity continue to rise. In the past three years, 73% of accountants report that their workload has increased because of new regulations, and 82% say economic volatility has increased demands for their work.”

Gartner also concluded that staff acceptance of technology, not access to technology per se, was a significant factor in reducing errors.  According to Ms. Bulman:

“It stood out that when users displayed acceptance of the technology they were using in accounting, they used it much more effectively, realized capacity improvements, and made significantly fewer errors.       It’s better to have less technology with a workforce that accepts it than to have the cutting edge of technology and resistant employees.         [B]uilding acceptance [has] more to do with putting in place practices that allow staff to perceive technology as easy to use and helpful.”

The challenges of building technology acceptance aside, from an audit committee perspective the key point seems to be that some level of accounting error is inevitable, and it is essential that companies have effective controls in place to detect and correct errors when they occur. Effective internal control over financial reporting is one of the central themes of the Sarbanes-Oxley Act, and oversight of both management’s and the auditor’s assessments of ICFR is a fundamental audit committee responsibility

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