The Relationship of Application Risks to Application Controls: A Study of Microcomputer-based Spreadsheet Applications

Manuscript originally submitted October 26, 1993; Accepted March 1, 1994 for publication. may cause needless re-invention of data and logic. The most serious risks occur, however, when the outputs of user-developed systems are invalid and when these data are used to make management decisions with financial impact on the business (Hayen and Peters, 1989). The quality of user-developed systems is an issue which has relevance to user managers and to MIS professionals. User managers are increasingly aware of the hazards of applications which produce poor data. MIS professionals are also concerned about quality assurance issues and are introducing audit and control procedures for certain “mission critical” systems (Sumner and Klepper, 1987). However, the vast majority of userdeveloped systems lack adequate review and sufficient controls (Edge and Wilson, 1990). The problem of user-developed systems represents a management control issue. Certain spreadsheet applications may pose greater risk to the organization The Relationship of Application Risks to Application Controls: A Study of Microcomputer-based Spreadsheet Applications