Usefulness of Spreadsheet Modeling in Financial Accounting and Reporting

21st century is the century of technology, and spreadsheet is one of the great technological inventions that greatly improve working efficiency. Spreadsheet is a computer application with functions that can improve the user's productivity in collecting, analyzing, and sharing tabular data sets. It displays multiple cells usually in a two-dimensional matrix or grid making up of rows and columns. Each cell contains alphanumeric text, numeric values, or formulas (Wikipedia, 2011). Bagranoff (2010) thought spreadsheet allows users to make complex calculations automatically and to change single number and update all related numbers at the click of a mouse. As one of the most popular financial software, spreadsheet is widely applied in areas such as accounting, finance, marketing, taxation, engineering, educational, scientific and medical fields (Ballantine, 1991). In 2004, SimCorp USA Inc and the Financial Executives Consulting Group found that about 64 percent of domestic companies depend on spreadsheet. Many authors view spreadsheet as a very useful tool for saving much of time and cost as an alternative to the manual worksheet. For example, Ballantine (1991) considered spreadsheet has had quite a dramatic effect on the nature of the work of many people, those who have been exposed to the spreadsheet concept have adjusted to the idea in a fairly easy manner since they were already familiar with the concept via the manual worksheet. At the same time, some authors see spreadsheet as a defective software because of its weakness in information security control, model building and process management. This essay will criticize the usefulness of spreadsheet modeling in financial accounting and reporting in four areas: ease of use, usefulness of information produced, security and control, and compliance with financial reporting.

Easier and more convenient are the major factors that spreadsheet being an alternative to the manual worksheet. One important problem users