Segregation of Duties for Core Business Processes

Author: Lynn Fountain

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