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Regulatory Update. Dean Buckner UK Financial Services Authority July 2007. Summary. As is now customary I shall review progress in the areas of compliance and spreadsheet risk management, over 2006-7. The issues …. Change of mindset (industry, senior mgt, IT) User training
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Regulatory Update Dean Buckner UK Financial Services Authority July 2007
Summary • As is now customary I shall review progress in the areas of compliance and spreadsheet risk management, over 2006-7
The issues … • Change of mindset (industry, senior mgt, IT) • User training • No “good practice” • Accreditation • Audit awareness • Data standards • Spreadsheet support
Management mindset • Spreadsheets are increasingly accepted as strategic solutions • A major change from five years • Many firms have given up on the ‘big solution’ • Risk magazine takes note • The house journal of quantitative finance • June 2007 issue
User training • Most problems are still the result of poor use of EUC solutions • Good training the obvious solution • But little budget! • Some changes from last year • But I am still seeing ‘dumb solutions’ that training would have easily prevented • A mitigating factor is the increasing use of spreadsheet control systems
Other mitigants • More firms using spreadsheets in a way that makes sense • E.g. using the strong pivot functionality in Excel with back-end relational databases • Commerzbank switching data aggregation from spreadsheets to computing grid • More technical solutions that take the compliance burden away from the user
Good practice • Little change from last year • Policy tends to be very high level • No industry view on good practice
Accreditation • No change • Accreditation seen as burdensome and risky • And difficult (implies generally accepted view on good practice, for a start)
Audit • Continues to improve • Increasing mention of spreadsheets in audit reports • General progress over 2003-6 • And EUC part of audit plans
Data • Data processing – spreadsheets now standard across the industry • Increasing use of compliance tools • Limitation on spreadsheet size was only constraint (but not any more!)
Microsoft • Biggest development of 2007 • Dialogue between firms, Microsoft and FSA • Attempts to address: • Code fragmentation problem • Lack of audit trail • Version control • However, now 1m rows, 16k columns!
Eusprig • Getting away from early obsession with ‘errors in spreadsheets’ • Needs to understand control environment in firms