Segregation of Duties: Why It Matters and How to Implement It in a Small AP Department

Segregation — or separation — of duties (SoD) is a practice essential for fraud prevention. It’s designed to prevent a single individual from having too much control over cash, which can make it far too easy to defraud the organization. Examples abound of employees entrusted with so many steps within the cash application or payment process that there are no effective guardrails. This enables personnel to steal large sums of cash, with the theft sometimes going undetected for a long time.

SoD is mandated for publicly traded companies by the Sarbanes-Oxley Act, implemented in 2002 to protect investors from the financial impacts of fraud. But it’s a best practice that should be followed by every organization, no matter its size or structure. That said, however, a problem arises for small organizations with very limited staff. They simply may not have enough people in AP or AR to divide up responsibilities.

IOFM asked its Advisory Panelists to weigh in on how they manage appropriate SoD practices when they only have a small team, or even just a single person managing the company’s cash. This white paper details recommendations resulting from their years of experience. Download “Segregation of Duties: Why It Matters and How to Implement It in a Small AP Department” to learn more.