Adequate segregation of duties is an important consideration in determining if a company’s control activities are effective in achieving the objectives of internal control. 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 are:
- Custody of assets,
- Authorization or approval of related transactions affecting those assets, and
- Recording or reporting of related transactions.
This report focuses on optimizing the Sarbanes-Oxley control environment ensuring proper segregation of duties exist.