I’ve told you many times that spreadsheets, the cockroaches of the workplace, can cost you billions, but I’m not sure that you’ve been listening. So I’m going to remind you of two situations where poor spreadsheets literally cost a company billions. As per this classic article in CIO on eight of the worst spreadsheet blunders ever:
Fidelity Loses $2.6 Billion
In January 1995, an accountant omitted the minus sign on a net capital loss of $1.3 Billion when transcribing the net realized gain from the funds financial records from one spreadsheet to another. As a result, they estimated that they would make a $4.32/share distribution, a number that was off by $2.6 Billion. Needless to say the shareholders weren’t happy when the truth was discovered.
Fannie Mae and it’s $1.13 Billion “Honest” Mistake
In a news release back in October 2003, Fannie Mae stated that a review of the third-quarter financials revealed a $1.136 Billion error in total shareholder equity as there were honest mistakes made in a spreadsheet used in the implementation of a new accounting standard.