Question

Having good amortization schedules is a great way of keeping track of interest expense, required payments, and period ending balances. I once had a client that created amortization schedules for there notes payable and when I reviewed them I noted errors in their formulas that resulted in their period ending balances being incorrect. While the errors did not result in a major misstatement, it did point out the need for controls over the spreadsheets that were used to create the financial information. Anyone with any thoughts?

Answer 1

ANSWER

Some precautions that can be taken to avoid errors in amortization schedules over spreadsheet:-

1.Ensure that only responsible person have access to these amortization schedules.

2.Please Check formulas periodically (say 6 months or quarter as feasible)for different amortization periods and for different items as well.

3.Ensure that the person responsible for making the schedules should not check the formulas .

4. Protect the spreadsheet with appropriate codes or passwords so that any layman or person not responsible for authorization to access open the file.

5. Ensure that systems are protected and data are not tampered on any disk or drive.