A-Z Popular Blog Internal Controls Search »
Internal Controls
 Advertisements
Company Issues

Quality Problems

Quality System

Visual Control

19 Examples of Segregation Of Duties

 , updated on
Segregation of duties is the principle that no single individual is given authority to execute two conflicting duties. This is a basic type of internal control that is used to manage risk. In many cases, segregation of duties is required by law or standards in areas such as accounting, corporate governance and information security. The following are illustrative examples of segregation of duties.

Vendor Maintenance & Posting Invoices

Separation of creating vendors in a system from posting and paying invoices. Helps to prevent fictitious customers with fictitious invoices.

Purchase Orders & Approvals

Purchase orders typically require multiple approvals.

Payments & Bank Reconciliation

Making payments to vendors and reconciliation of bank statements.

Paychecks & Bank Reconciliation

Paying employees and bank reconciliation.

Journal Entry & Approvals

Separation of entering a journal entry and approval of journal entries.

Custody of Cash & Account Receivable Reconciliation

Separating roles that manage cash deposits from customers and reconciliation of those deposits with sales records.

Hire & Set Compensation

Hiring an employee and setting their compensation. Helps to prevent people from hiring friends at an inappropriate salary.

Hire & Approve Hire

Hiring an employee often has to be approved by multiple departments.

Expenses & Expense Approvals

Separation of claiming and approving expenses.

Asset Custody & Asset Inventory

Separation of custody of assets and record keeping related to those assets.

Sales & Approvals

Separation of selling and approval of sales deals such as approval of margins and customer credit.

Customer Maintenance & Credit Notes

Adding customers in a system and posting credit notes.

Shipping & Customer Accounts

Shipping and receiving is separated from posting transactions such as credit notes to a customer's account.

Risk Management & Trading

Separating risk taking activities such as financial trading from risk management activities.

Advising Clients & Trading

Separation of advising banking clients on things such as mergers & acquisition from trading that firm's stock.

Development & Administration

Separating development of software and administration of systems, particularly production systems. Allows process to be followed in updating code that is tested and reviewed.

Development & Operations

Separation of software development and the operation of related systems and services. Allows problems with software to be reported accurately and managed within process.

System Access Permissions

Adding and editing system access permissions is viewed as a root authority that is separated from all financial management activities.

System Configuration & Approvals

Changing systems and software typically requires a number of approvals. For example, implementing changes to firewall rules is separated from approving those changes as a basic security control.
Overview: Segregation Of Duties
Type
Segregation Of Duties
Definition
The principle that no single individual is given authority to execute two conflicting duties.
Also Known As
SoD
Separation of Duties
Related Concepts
Next: Internal Controls
More about internal controls:
Change Control
Compliance
Conformance
Control
Credit Risk
Fat Fingers
Governance
Internal Controls
IT Controls
Management
Metrics
Risk Control
Risk Management
Specifications
Work Process
If you enjoyed this page, please consider bookmarking Simplicable.
 

Internal Controls

A definition of internal controls with examples.

Administration Examples

An overview of administration with examples.

Checks And Balances

An overview of checks and balances.

Control

An overview of control with examples.

Management Importance

An overview of management importance with examples and counterexamples.

Leave

An overview of employee leave with examples.

Visual Control

An overview of visual control with examples.

Quality Problems

The common causes of quality problems.

Transparency

An overview of transparency with examples.

Management

A guide to management techniques.

Management Experience

A list of management experience that is common amongst non-managers.

Standard Operating Procedures

An overview of standard operation procedures.

Management By Results

An overview of management by results with examples of results to measure.

Organizational Planning

A list of the common types of organizational planning.

Impact Analysis

An overview of impact analysis with examples.

Facilitation

The practice of running an efficient meeting.

Management Direction

An overview of management direction with examples.

Team Development

An overview of team development with examples.
The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map