Purpose

A fundamental element of internal control is the segregation of certain key duties. The basic idea
underlying segregation of duties is that no employee or group should be in a position both to
perpetrate and to conceal errors or fraud in the normal course of their duties. In general, the principal
incompatible duties to be segregated include:

- Custody of assets
- Authorization or approval of related transactions affecting those assets
- Recording or reporting of related transactions
- Execution of the transaction or transaction activity

An essential feature of segregation of duties/responsibilities within an organization is that no one

employee or group of employees has exclusive control over any transaction or group of transactions.

Based on the above criteria, this worksheet has been designed to highlight conflicting duties
performed by one individual or group of individuals (potential lack of proper segregation of duties).
Audit teams are encouraged to use this form to help identify potentially commingled duties within
accounting processes that may constitute a control weakness.

Instructions
1) The Tester should inquire to determine which individuals are responsible for certain duties within
the company/location.

2) The matrix should be used to determine if there is potential for a segregation of duties conflict. Use
the following key to identify the potential financial risk and segregation of duties conflicts:

X - Segregation of duties conflict

H - High financial risk
M - Medium financial risk
L - Low financial risk

3) The potential issues should be investigated to ensure a mitigating control prevents the individuals
from performing both tasks.

4) If a control is not present, a conflict of duties may be present.

Source: www.knowledgeleader.com
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Source: www.knowledgeleader.com
Segregation of Duties Matrix
- Performance Task Risk Assessment

Customer Master Maintenance

Release Purchase Requisition

Payroll Bank Reconciliations

AR Clear Customer Account

Service Master Maintenance

Approve Asset Acquisitions

Open/Close General Ledger
Vendor (add/delete/change)

Sales Agreement/Contracts

Fixed Asset Reconciliation

Ledgers to General Ledger
Sales Pricing Maintenance
Customer Master (Credit)

Record Fixed Assets into

Item Master Maintenance

Purchase Requisitioning

Approve Journal Entries

Purchasing Agreements

Approve Wire Transfers

Bank Reconciliation AR
Bank Reconciliation AP

Inventory Adjustments
Service Receipts Entry

Reconciliation of Sub-

Initiate Wire Transfers

(Manual or Electronic)
Sales Invoice Release
Purchase Order Entry

Goods Receipt on PO

Employee Master File

Issue Payroll Checks

Sales Order Release
AR Cash Application

Post Journal Entries

Fixed Asset System

Physical Inventory
Process Purchase
AP Voucher Entry

Sales Order Entry

Maintain Security
Supplier Master

Process Payroll
Sales Invoicing

Sales Rebates
AP Payments

Ship Product
Maintenance

(add/delete)
Requisition
Task Group Description Grp 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

AP Voucher Entry 1
AP Payments 2
Vendor (add/delete/change) 3
Bank Reconciliation AP 4
Supplier Master Maintenance 5
Bank Reconciliation AR 6
AR Cash Application 7
AR Clear Customer Account 8
Item Master Maintenance 9
Service Master Maintenance 10
Purchase Requisitioning 11
Release Purchase Requisition 12
Process Purchase Requisition 13
Purchase Order Entry 14
Purchasing Agreements 15
Goods Receipt on PO 16
Service Receipts Entry 17
Physical Inventory 18
Inventory Adjustments 19
Sales Agreement/Contracts 20
Ship Product 21
Customer Master Maintenance 22
Customer Master (Credit) 23
Sales Invoicing 24
Sales Invoice Release 25
Sales Order Entry 26
Sales Order Release 27
Sales Pricing Maintenance 28
Sales Rebates 29
Open/Close General Ledger 30
Post Journal Entries 31
Approve Journal Entries 32
Reconciliation of Sub-Ledgers to
General Ledger 33
Initiate Wire Transfers 34
Approve Wire Transfers 35
Approve Asset Acquisitions 36
Record Fixed Assets into Fixed
Asset System 37
Fixed Asset Reconciliation 38
Employee Master File (add/delete) 39
Process Payroll 40
Issue Payroll Checks (Manual or
Electronic) 41
Payroll Bank Reconciliations 42
Maintain Security 43

Source: www.knowledgeleader.com 3