What is the segregation of duties?

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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