Segregation of duties involves dividing tasks among multiple personnel to prevent fraud, theft, and errors. It is critical for accounting and general safety, security, and performance. It requires different staff members for authorizations, task completion, and auditing. It can be a challenge in small businesses but is a critical part of security programs in large companies.
Segregation of duties is the use of multiple personnel to perform tasks to limit the possibilities of fraud, theft, and errors. By dividing a task into components handled by different staff members, a company can prevent unwanted activity and exercise better quality controls. This can be a challenge in a small business where staffing may be too limited, but in large companies it can be a critical part of a security program. In some regions, laws specifically require separation of duties for sensitive tasks; In one particularly important example, a ship’s captain cannot launch cruise missiles without following a very specific and separate chain of command.
In a workplace where segregation of duties is used, tasks are divided into three different phases. In the first phase, someone must approve an activity, such as handing over a computer to a new staff member or generating paychecks. In the second phase, someone really needs to do the task; a member of the IT department provides a computer to a staff member, for example, and the staff signs it off. Finally, the third component involves auditing to make sure the task was done properly.
Separation of duties requires a different staff member at each point. Staff members in charge of authorizations are not actually allowed to perform activities, which limits the chances that employees can take their own initiative to do things like raise company funds. Keeping the audit separate means that before authorizing a task, an employee must ensure that it is appropriate, as the auditor will flag it if there is a problem. Similarly, the separation of auditors and task completers means that a separate staff member investigates claims of incorrectly completed tasks and regularly audits task performance to ensure that no staff member is performing outside the scope of the task. its functions.
For accounting, the separation of duties is critical. This limits the possibilities of financial fraud and also provides a mechanism to detect errors; the person who cuts paychecks, for example, might ask for confirmation on an unusually large or small check. Maintaining accounting integrity is important to businesses of all sizes, and separation of duties makes it easy to audit and control the accounting system.
This is also important for general safety, security, and performance. Separation of duties plays a role on the factory floor, in military operations, and in activities like information security. If a company has situations where a single person could do something and make sure it went undetected, this represents a security threat and requires an assessment to see if separation of duties is possible.
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