Segregation of Duties (SoD) is a core preventative control designed to reduce the risk of internal fraud, embezzlement, or critical errors by ensuring that no single individual controls all stages of a high-value financial transaction or operational process.
To implement an effective SoD framework, transaction lifecycles are divided across distinct functional roles:
[Transaction Request] ---> [Independent Review] ---> [Final Settlement]
(Initiation Role) (Verification Role) (Authorization Role)
- Initiation Role: The individual who requests or inputs the transaction into the system (e.g., an procurement clerk entering a new vendor invoice).
- Verification Role: An independent individual who reviews the transaction data against supporting documentation to confirm its accuracy (e.g., a finance analyst matching the invoice to a purchase order).
- Authorization Role: A supervisor with explicit system privileges who approves the final transaction execution and financial settlement.
These role splits are enforced through system application permissions and access management matrices, ensuring that users cannot assign themselves overlapping privileges that would compromise the SoD framework.