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    Egregation of duties importance

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    Why is the segregation of duties is so important. What type of audit procedures should be used to determine whether lack of segregation of duties might permit loss of cash?

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    https://brainmass.com/business/external-auditing/egregation-of-duties-importance-295190

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    1. Why is the segregation of duties is so important?

    Segregation of duties (SoD) is one important component of good internal controls. This means that "good business practices ensure that all departmental transactions reflect appropriate business procedures by ensuring that no one individual employee can complete a significant business transaction in its entirety." (http://amas.ucsd.edu/Services/Segragation.htm).

    It is important because it acts to safeguards asset by assuring that the organization's assets are properly used and safeguarded from fraud by individual(s)." SoD is "aimed at limiting opportunities for abuse by a single person such as requiring two signatures on a check or separating the creation and approval of sensitive transactions." (http://www.symsure.com/index.php/solutions/segregation-of-duties).

    In fact a lack of segregation of duties is implicated in almost all occurrences of fraud and embezzlement. When duties are properly segregated the potential for loss or inappropriate use of the organizations assets and cash are minimized, as it stops ...

    Solution Summary

    Why is the segregation of duties are so important is determined. The type of audit procedures which should be used to determine whether lack of segregation of duties which might permit loss of cash is determined.

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