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Separation of Duties (SoD) — also called Segregation of Duties — refers to a set of preventive internal controls in a company's compliance policy that mitigates the risk of error and fraud by requiring more than one person to complete a transaction-based task.

Segregation of duties (SODs) is an important concept to internal control frameworks, financial reporting and regulatory compliance, including the Sarbanes-Oxley Act (SOX). It is a component of an effective control environment.

Segregation of Duties (SOD) is a basic building block of sustainable risk management and internal controls for a business. The principle of SOD is based on shared responsibilities of a key process that disperses the critical functions of that process to more than one person or department.

There are four general categories of duties or responsibilities which are examined when segregation of duties are discussed: authorization, custody, record keeping and reconciliation. In an ideal system, different employees would perform each of these four major functions.

Examples of segregation of duties: The person who maintains and reconciles the accounting records should not be able to obtain custody of checks. The person who opens the mail and prepares a listing of checks received should not be the person who makes the deposit.

Segregation of duties is designed to minimize the risk of fraud and errors, and protect company assets such as data or inventories. This is done through the appropriate assignment of access rights by distributing responsibility for business processes and procedures amongst several users.

The SoD matrix plots user roles on both the X and Y axes to clearly show SoD conflicts. It also maps activities and duties to roles within the workflow to help compliance teams segregate incompatible duties.

Segregation of Duties In Accounting A few examples of SoD in an accounting department: The person who defines paychecks is not also responsible for authorizing paychecks. The person who deposits or withdraws cash is not the same person who reconciles bank accounts.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232
Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232