Segregation of duties

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Segregation of duties means splitting responsibilities within a process between different individuals or parts of an organisation, to reduce the risk of fraud.

Having dual controls, for example:

  • Capture by one person & verification or review by another person
  • Segregating tasks between departments.

In a larger organisation each of the following departments cannot perform tasks for other departments, each is separate - front office, risk management, compliance, legal, operations, finance, etc.

Within each department, responsibilities are split & access rights to systems & information is on a need to have basis to perform the tasks.

Segregation of duties - dealing, settlement and reporting
“The front office does the deal, but doesn’t settle the money.
The back office settles the money, but doesn’t do the deal.
Historically, the middle office is a control function that does the reporting and ensures that system controls are enforced."
Naresh Aggarwal, associate policy and technical director, Association of Corporate Treasurers, May 2022.

See also

Other resource