Auditors discover most material errors in spreadsheets before much harm is done, but the huge number of spreadsheets the typical company uses and the frequency with which they are updated multiplies the risk.

Companies are well aware of the potential problem. Usage of spreadsheets related to accounting processes may be formalized, so that there are records of who used the programs and for what purposes. There may be specific guidelines for how files are to be named (and renamed), where they are to reside, who will review changes, and how changes are documented.

A public company's auditors may deem such manual-intensive procedures to satisfy internal-controls obligations under the Sarbanes-Oxley Act - which is one reason why a handful of software products designed to automate spreadsheet management have not been more successful. "It's an area that we thought showed a lot of promise four years ago, but we've reduced our coverage of it over the past year because it has not sparked the interest of the market," says Gartner analyst Jay Heiser.

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