“Every complex spreadsheet contains an error.” Back when Lotus 1-2-3 was new and cool, I read an article that made this claim. The topic was in the news last week with a challenge to the very widely quoted research by Carmen Reinhart and Kenneth Rogoff regarding financial crises. A graduate student tried to duplicate their results as a classroom assignment; he found a spreadsheet error (plus other reasons to criticize their work).
Spreadsheet errors are not just an academic problem. The potential for spreadsheet errors was cited by JP Morgan in its investigation of $7 billion of “London Whale” losses. There is substantial evidence for massive error rates in spreadsheets. Raymond Panko’s summary of the research on the topic indicates very high infestation of mistakes in business spreadsheets.
Several techniques I have learned over the years help reduce errors....
