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What is the segregation of duties?

Author:
Harold Averkamp, CPA, MBA

Definition of Segregation of Duties

The segregation of duties involves dividing a task so that more than one person is involve in the company’s transactions. By segregating duties, it will require at least two people to agree to steal or embezzle a company’s resources.

The segregation of duties (or separation of duties) is part of a company’s internal controls for safeguarding its assets.

Example of Segregation of Duties

An example of the segregation of duties is a company’s policy to have its checking account bank statement reconciled by someone other than a person writing checks and someone other than a person recording amounts in the company’s general ledger.

Another example of the segregation of duties is that the person handling cash is not the person recording the cash amounts in the company’s ledgers.

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

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