Management should be aware of any changes that affect a company’s profits, the net income (or “bottom line”). Therefore, no matter what, you should always check the formula when using Excel or even double-check your calculations, if you are using a calculator. When reviewing financial reports, always kindly ask, “did you check the formula?” Donna Dickerson is the assistant controller for a large manufacturing company and works directly under the supervision of the controller, Nicole Randall. 

While reviewing some documents Nicole prepared, Donna notices a mistake in the target profit calculations. The Excel spreadsheet used to summarize fixed costs has an error in the formula, and some of the individual costs listed are not included in the total. Donna is aware that the target profit calculations are used for planning purposes, so she brings the error to the controller’s attention. Nicole doesn’t seem concerned. “It really doesn’t’ matter,” says Nicole. “Those figures never show up on the financial statements, so a little mistake won’t matter.” 

1. Is Nicole correct? 

2. What should Donna do? 

3. As the assistant ? controller, what would you do?

Answer rating: 100% (QA)

Answer 1 Nicole is not correct 2 Donna should report the error to her supervisor 3 As the assistant ... View the full answer