Segregation of Duties for Core Business Processes

Also known as Separation of Duties, Segregation of Duties is a crucial aspect of risk management, as well as SOX compliance. Organizations must continue to identify the inherent risk that exist in the absence of effective segregation and ensure that suitable mitigation controls are implemented.

Segregation of duties (SOD) is the cornerstone of strong internal control. Inability to maintain proper SOD can hamper an organization’s ability to deliver service efficiently. Personnel often struggle with the proper concepts of what contributes to SOD.  When resources are scarce, the concept is even more difficult.

A separate course titled “Segregation of duties for the office of the CFO” highlighted why and how the office of the CFO should pay special attention to segregation of duties (SOD).  This course delves deeper into core business processes and examine the concepts of which duties should be segregated to provide adequate internal control.

The basics of segregation of duties indicates that no one individual should be given or assigned job functions in more than one of the following categories:

• Asset custody
• Authorization and approval
• Recordkeeping
• Reconciliation

This course examines each of the following business processes and discuss key roles/tasks that should be evaluated for proper segregation of duties.

• Revenue and receivables
• Disbursement
• Procure to pay
• Treasury and cash
• Inventory
• Payroll