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  • What functions should be separated for proper segregation of duties to exist?

    For proper segregation of duties (SOD) to exist, the company should ensure that an individual employee does not have access to more than one responsibility that relates to authorization, record keeping or custody of assets. For example, an employee should not have the ability to write checks and also record cash disbursements in the accounting records. If the employee had both duties, then the employee could write checks to anyone they wanted and fictitiously record the disbursement as an expense in the normal course of business!

  • What duties should be segregated in an IT department?

    The nature and roles of each individual in an IT department will vary, so it’s important to understand the specific role each IT person has in the broader IT function. At a very high level, roles and access should be outlined clearly so that an individual does not have the ability to implement a system change without proper supervision.

  • How to prevent a fictitious employee from being paid?

    This is a key risk for any company and the best way to prevent this risk is to have proper segregation of duties. What this means is that you should separate the approval process for hiring employees, the accounting process for paying employees, and the actual person that distributes paychecks to employees. As long as one person doesn’t have the ability to perform 2 or more of those actions, then proper segregation of duties in the HR cycle is low and the risk is reduced!