Definition of Segregation of Duties
The segregation of duties involves dividing a task so that more than one person is involve in the company's transactions. By segregating duties, it will require at least two people to agree to steal or embezzle a company's resources.
The segregation of duties (or separation of duties) is part of a company's internal controls for safeguarding its assets.
Example of Segregation of Duties
An example of the segregation of duties is a company's policy to have its checking account bank statement reconciled by someone other than a person writing checks and someone other than a person recording amounts in the company's general ledger .
Another example of the segregation of duties is that the person handling cash is not the person recording the cash amounts in the company's ledgers.