Communications of the Association for Information Systems


The Sarbanes-Oxley Act of 2002 (SOX) forced corporations to examine their spreadsheet use in financial reporting. Corporations do not like what they are seeing. Surveys conducted in response to SOX show that spreadsheets are used widely in corporate financial reporting. Spreadsheet error research, in turn, shows that nearly all large spreadsheets contain multiple errors and that errors of material size are quite common. The first round of Sarbanes-Oxley assessments confirmed concerns about spreadsheet accuracy. Another concern is spreadsheet fraud, which also exists in practice and is easy to perpetrate. Unfortunately, few organizations maintain effective controls to deal with either errors or fraud. This paper examines spreadsheet risks for Sarbanes-Oxley (and other regulations) and discusses how general and IT-specific control frameworks can be used to address the control risks created by spreadsheets.