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. 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 delves into core business processes and examines the concepts of which duties should be segregated to provide adequate internal control. Often, Segregation of Duties can be a problem for small companies due to lack of resources. However, it is imperative that organizations still recognize the inherent risks that exist in the absence of proper segregation and ensure they put in appropriate mitigating controls.
Publication Date: March 2022
Designed For
Financial executives, financial management, accountants and finance professionals, internal and external auditors, operational and compliance professionals.
Topics Covered
- Explore basic requirements for SOD
- Explore definition of SOD roles and processes
- Examine risks of inadequate SOD
- Identify SOD opportunities in role assignments
- Examine SOD within individual business processes
- Revennue/receivables
- Disbursement/payables
- Procure to pay
- Treasury/cash
- Inventory
- Payroll
Examine control mechanisms
Learning Objectives
- Describe segregation of duties (SOD) and recognize how it applies to roles and processes
- Identify risks of inadequate SOD
- Recognize how SOD applies to individual business processes: Revenue and receivables, disbursement, procure to pay, treasury and cash, inventory, payroll
- Identify SOD opportunities in role assignments
- Describe control mechanisms
- Identify mitigation techniques when resources are not sufficient to segregate duties
- Identify the first step in how to determine SOD
- Identify the preferred number of individuals involved in managing a financial process
- Identify the responsibility that purchasing employees should not have
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Business Management & Organization (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Lynn Fountain
Lynn Fountain has over 38 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance. Lynn has held two Chief Audit Executive (CAE) positions for international companies. In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees. The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.
Ms. Fountain is currently engaged in her own consulting and training practice. She is a highly sought-after trainer and international speaker. In addition, Ms. Fountain has assisted numerous companies with enterprise risk management frameworks, internal audit processes and financial accounting. She also serves as a discussion leader for the AICPA for numerous classes finance, accounting and risk management topics.
Ms. Fountain is the author of three separate technical books. Her first book released in 2015 by the Institute of Internal Auditors Foundation is entitled “Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”. Her second book “Leading the Internal Audit Function” was released in October 2015 by Taylor & Francis Publications. This book serves as the initial launch for a series of leading practice internal audit and information technology publications. Her third book “Ethics and the Internal Auditor’s Dilemma” was released in December 2016.
Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials.