Question

Segregation of duties is essential t good internal control. Increasingly computer systems automatically authorize and record transactions, such as generating purchase orders when the quantity on hand of an inventory levels fall below its reorder point. Do you view this as violating segregation of duties? Why or why not?

Answer 1

Dear sir / madam,

• Absolutely segregation of duties is essential and good internal control
• In case of large organisations with highly automated business process,Computer based rules will manage the business process.
• It cannot be treated as violating the segregation of duties because
  • While in the process of devolopment of the software these procedures receive the management authorisation
• The automation of segregation of duties may provide an efficient and effective system of internal control in the business process

To sucessfully impliment the segregation of duties in information systems a number of concerns/problems needs to be addressed

• The process used to ensure the authorization rights of person to use the system
• The methods of authentication used like pin, passwords etc;

Conclusion: Although consolidating authorization,execution and record keeping functions within a software programe may appear to be a bad idea, Doing so may increase the internal controls of the business

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