More than half of finance professionals and global business leaders are not completely confident they can identify financial errors before reporting results, according to a survey commissioned by software specialist BlackLine.
In addition, nearly 70 per cent of respondents believe that their organisation has made significant business decisions based on inaccurate data. Many identified this as a hidden problem, with over a quarter (26 per cent) stating concern over errors that they know must exist, but of which they have no visibility.
Independent global research firm Censuswide polled over 1,100 C-suite executives and finance professionals in large and midsize organizations across the world to establish accuracy confidence levels in financial data and perceived impact of errors on business.
The results indicate that although over half (54 per cent) of respondents overall still claim to completely trust the accuracy of their own financial data in general, there is a significant discrepancy between the views of the C-suite and that of finance professionals.
While 71 per cent of C-suite respondents claimed to completely trust the accuracy of their financial data, only 38 per cent of finance professionals said the same.
BlackLine says this suggests that CEOs are making business decisions on numbers in which they are confident, but the people preparing the statements and reports are not, thus increasing the level of risk and regulatory concerns for large organisations.
As well as the 69 per cent who think that either they themselves or their CEO has made a significant business decision based on out-of-date or incorrect financial data, a third (36 per cent) cite that this has definitely occurred in their organisation.
Mario Spanicciati, chief strategy officer at BlackLine, said: “It is concerning that so many organisations are not confident in their ability to identify errors and ensure accurate reporting.
“Unless there is recognition that this is an unacceptable and unnecessary level of risk, we can expect to see an increase in large-scale financial misreporting.
“Business leaders have a responsibility to ensure that the processes and technology are in place to enable continuous visibility and accuracy of financial data. At a time when advanced tools to help automate controls and ensure accuracy are available and proven, there’s really no excuse.”