The segregation of duties concept disallows the assignment of responsibility to one person for the acquisition of assets, their custody, and the related record keeping. Segregation of duties is one of the most effective internal controls. It just means that no one person should be responsible for doing everything. Authorization, recording, and custody of assets should be performed by different employees.

For example, one person can place an order to buy an asset, but a different person will record the transaction in the accounting books. By separating duties, it is much more difficult to commit fraud, since at least two or more people must work together to do so - which is far less likely than if one person is responsible for all aspects of an accounting transaction.

Although it improves security, breaking tasks down into separate components can negatively impact business efficiency i.e it is time-consuming and increase costs, complexity and staffing requirements. For that reason, most organizations apply Segregation of Duties to only the most vulnerable and the most mission critical elements of the business. Segregation of duties also means separation of duties


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