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M&S results hit by spreadsheet mishap

15th Jul 2016
Marks & Spencer
iStock_Marks & Spencer_itchySan
Marks & Spencer

Marks & Spencer chief financial officer Helen Weir told the Financial Times last week she was shocked after discovering that a spreadsheet summing error forced the retailer to issue a correction to its quarterly trading statement.

The original statement issued at 7am reported group sales had grown 1.3%. But at 1:31pm a correction was released showing that group sales had in fact fallen 0.4%.

Only the percentages were reported in the two statements, not actual sales figures.

The reporting mishap added to the company’s gloom as like-for-like sales declined 8.9% on the previous quarter. Chief executive Steve Rowe pointed to weakening consumer confidence in the run up to the EU referendum and its immediate aftermath.

Weir put the mistake down to double-counting in a spreadsheet used to compile the quarterly statement. One of her colleagues started to question the accuracy of the original figure during a conversation with an analyst and as soon as the error was diagnosed, M&S issued the correction.

The company would not go into further detail about the circumstances leading up to the correction. "It was a clerical error," an M&S spokesman said. "The important thing was that we spotted it and corrected it immediately."

The company confirmed that it was reviewing its reporting procedures in light of the mistake, but that it was too soon to report any conclusions from either the company or its auditor, Deloitte.

It’s not the first time a spreadsheet error has embarrassed a listed UK company. SuperGroup experienced a similar issue in 2012 and in the previous year Mouchel was struck by an £8.6m error attributed to a miscalculation in an actuary’s spreadsheet.

These kinds of bungles are less prevalent in the US, where auditors have targeted spreadsheet-based reporting systems as major risks for listed companies subject to the provisions of the Sarbanes-Oxley Act.

Replies (8)

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By RichardLambert
15th Jul 2016 21:32

Unfortunately, spreadsheet errors are all too common. The ease of use of Excel, time pressures and poor spreadsheet design all contribute to many a howler.
With specialised reporting software preferable but expensive, a good place to start is in embedding 'FAST' principles into spreadsheet methodology from the very start. (Flexible, Accurate, Structured & Transparent). See www.fast-standard.org.
This isn't a panacea for all reporting problems, but is a great way to start in keeping things simple and straightforward. Some of the FTSE 100 have still not heard of this, so there's some way yet to go!
From Richard Lambert, Cima member in Derbyshire.

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By sysmod
16th Jul 2016 18:56

Nice that it was reported on the same day as the annual conference of the European Spreadsheet Risks Interest Group (www.Eusprig.org ) !
The Spreadsheet Safe standard (www.spreadsheetsafe.com) recommends that spreadsheets should be reviewed (which this one was) BEFORE (which was not done!) release.

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By Cantona1
17th Jul 2016 16:51

There is no spreadsheet error, but human error.
What was the name of the error before the invention of spreadsheet? Calculator error?

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Replying to Cantona1:
By kevinringer
18th Jul 2016 13:31

Cantona1 wrote:

There is no spreadsheet error, but human error.
What was the name of the error before the invention of spreadsheet? Calculator error?

Not sure about these new-fangled terms but I do admit to suffering from (but never "making") the odd abacus error.
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By alan.falcondale
21st Jul 2016 11:01

Anyone running a book as to what the error may have been attributable to:
my guess would be 'subtotal'

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Replying to alan.falcondale:
By Scriptic
26th Jul 2016 08:16

Or using drag and drop for summing named ranges.

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By pbeavan
21st Jul 2016 12:29

Remains utterly baffling to me why so many large organisations are still so reliant on spreadsheets? Spreadsheets should be used for data manipulation not for underpinning business critical (and critical business) decisions!

West Coast Mainline Franchise debacle anyone? London Whale Trades?

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By bobsto12
04th Aug 2016 15:48

I work on external reporting for a plc and quite frankly senior management don't help. They insist on fiddling with formats, measures and everything else right up to the night before. Also you can't rely on the auditors to spot anything. The idea that you need to allocate time to doing so good old fashioned double checking seems unfathomable to anyone but me.

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