Segregation of duties
Definition
The principle that the authorisation, custody, and recording of any transaction should be performed by different people. Its absence is the single most common control weakness enabling asset misappropriation.
Related terms
- Cash larceny
- Taking cash that has already been recorded in the accounting system. The record exists, so the theft creates a provable discrepancy between...
- Fraudulent disbursement
- A scheme in which the perpetrator manipulates the organisation's outbound payment process to divert money to themselves or an accomplice. The main...
- Ghost employee
- A fictitious or departed person on the payroll whose wages are diverted to the perpetrator. Detection relies on headcount reconciliation, supervisor attestation...
- Lapping
- A scheme to conceal the theft of cash from customer receipts by applying a later customer's payment to the earlier customer's account....
- Skimming
- Taking cash or other payments before they are entered into the accounting records. Leaves no direct accounting discrepancy, making detection dependent on...
Explained in
- Asset Misappropriation and SkimmingThe principle that the authorisation, custody, and recording of any transaction should be performed by different people. Its absence is the single most common...