Every compliance audit requires a Segregation of Duties (SOD) analysis. This analysis provides a comprehensive view of which employee positions are performing which finance-related tasks.
The SoD identifies points in your financial processes where fraud or mistakes might go undetected because one person is completing several finance-related tasks that conflict with each other (segregation conflict). With information from the SOD, you can develop a way to mitigate the conflicts and minimize the risk of fraud and mistakes that can lead to reporting errors.
How To Complete an Effective SOD
Your external auditor can complete the SOD. Or you can complete it yourself using internal audit resources or a third-party consultant. The advantages to the latter approach include potential cost-savings and, more important, the ability to proactively mitigate conflicts before the audit.
We've identified five steps for taking the SOD analysis in-house and making it effective. These include:
- Step 1: Choose Your Approach
- Step 2: Tap Your Internal Knowledge Network
- Step 3: Identify and Prioritize Conflicts
- Step 4: Develop Mitigation Plans
- Step 5: Apply Knowledge Beyond the Audit
For more details about this five-step process, download our tipsheet 5 Steps to an Effective Segregation of Duties Analysis.
Share Your SOD Story
Who completes your SOD analysis? Do you complete one yearly? What was the biggest SOD conflict you've found? Share your SOD story in the comment box below.