Segregation of duties
From ACT Wiki
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.
- Back office
- Four eyes
- Fraud Advisory Panel
- Front office
- Middle office