definition of terms

Segregation of duties (SoD), also known as separation of duties, refers to the principle of separating operational or security-related tasks in such a way that no single person has complete control over an entire process. The aim is to prevent errors, abuse, and manipulation and to clearly separate responsibilities.

Functionality

The SoD principle divides critical tasks into independent steps. Typical implementation: one person initiates an action, another reviews or approves it ("dual control principle"). This creates a system of checks and balances that strengthens transparency and accountability.

Separation of functions in practice

In practice, segregation of duties (SoD) means that tasks that could conflict with each other are clearly assigned to different people or roles. This prevents a single person from completely controlling or manipulating sensitive processes.

Companies typically implement the separation of functions in four key areas:

• Authorization: Verification and approval of transactions
• Custody: Controlling access to physical and digital assets
• Reconciliation: Ensuring the accuracy and completeness of transactions
• Recording: Creation and maintenance of the associated transaction data

Enforcement can take place in two ways:

• Static: Conflicting roles are permanently separated (e.g., no simultaneous approval and release of payments).
• Dynamic: A second authorization is required in real time before a transaction can be completed.

Typical areas of application include finance, IT, cybersecurity, and other sensitive areas of business. A clear distribution of roles can significantly reduce risks such as insider threats, fraud, forgery, or data misuse.

Furthermore, segregation of duties is an important component of compliance, for example under the Sarbanes-Oxley Act (SOX), and contributes to accountability, accuracy, and error prevention.

Areas of application

• Financial and accounting processes: Separation of payment approval, posting, and control to prevent fraud or errors.
• IT and security management: Separation of system administration, development, and auditing to prevent unauthorized access or data manipulation.
• Identity & Access Management (IAM): SoD stipulates that no person may simultaneously have rights for conflicting tasks (e.g., "creating" and "approving" authorizations).

 

A classic example:

An employee may review an invoice, but not approve it themselves. This separation enables control. In IT, this principle is particularly important in identity and access management (IAM), especially in regulated industries such as finance, healthcare, and manufacturing.

Conclusion

Segregation of duties (SoD) is a key component of modern corporate and IT security. It ensures that no single person can control critical processes on their own, thereby creating transparency, accountability, and protection against misconduct. Clearly defined roles, controls, and regular reviews enable companies to significantly reduce the risk of fraud, data misuse, and compliance violations.