10 Rational Risk Measures

Changes – Each change adds risk. Modeling creates risk. Measure: Count changed cells.

Formula Proliferation – Every identical formula behaves exactly the same way; thus, we only need test each distinct formula. Measure: Count distinct formulas

Complexity – Each formula function and operator adds complexity. Measure: Count distinct formula functions and operators

Transparency – Each step required to find a formula’s source values and meaning decreases transparency. Measure: Count steps to precedents

Consistency – We expect formulas in row (traditional calculations) or column (tables) to be identical. Auditors shouldn’t assume this, but modelers shouldn’t make it easy for auditors to make mistakes. Measure: Count inconsistent formulas

Structure – Calculations flowing in normal reading style are easier to audit. Measure: Count out of order precedents.

Labels – All numeric values should be labeled so we can understand their meaning. Measure: Count missing labels.

Data validation – Data validation helps prevent erroneous inputs and associated erroneous results. Measure: Count input cells missing validation

Mixing Inputs with Calculations – Keeping users out of calculations helps prevent inadvertent changes. Measure: Count mixed worksheets.

Unprotected Calculations – Locking calculations helps prevent inadvertent changes. Measure: Count unprotected calculation worksheets.