1 min read · Apr 2026

Segregation of Duties

Segregation of duties (SoD) is an internal control principle that requires dividing critical tasks and responsibilities among different individuals to prevent any single person from having the ability to both commit and conceal errors or fraud. In practice, SoD separates the functions of authorisation, custody, record-keeping, and reconciliation across different people or roles. It is one of the most fundamental controls in financial management and a standard requirement in audit and compliance frameworks.

Why This Matters

Segregation of duties is the most basic safeguard against financial fraud and error. When one person can create a vendor, approve a payment, and reconcile the bank statement, there is no independent check on any of those actions. For mid-market companies with small finance teams, implementing SoD is a challenge — but it is not optional. Auditors will flag its absence, and the risk exposure without it is real. The question is not whether to implement SoD but how to design it practically within the constraints of team size.

Where This Fits

This term sits within the Data Governance & AI Readiness area of Performance & Control.

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