Security & Compliance

  • 14 min read

Segregation Of Duties in Internal Controls -A Guide for 2024

Rohit Rao

27th August, 2023

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Within the framework of your organization's internal control system, Segregation of Duties (SoD) functions as a robust safety net. As IT managers, your pivotal responsibility involves ensuring seamless operations and mitigating potential risks. 

SoD assumes a central role in the pursuit of these dual objectives, underscoring its significance and warranting your focused consideration.

SoD serves as a crucial mechanism to mitigate a diverse range of risks, such as unauthorized access to sensitive information or fraudulent activities that could potentially jeopardize the stability and reputation of the organization.

SoD is centered around the intentional distribution of tasks and responsibilities among employees who are involved in key processes and functions. This deliberate separation ensures that no single individual possesses unmonitored authority over multiple stages of a critical operation. 

By implementing this meticulous division, your team establishes a robust defense mechanism against various threats, including fraudulent activities, inaccuracies, and weaknesses within their operations.

The primary objective of SoD is to establish a system of checks and balances that minimizes the likelihood of misconduct or errors occurring undetected. This is achieved by preventing any one person from having the ability to initiate, authorize, and complete a transaction or process without oversight from other individuals. 

As a result, SoD helps to maintain transparency, accountability, and reliability in an organization's day-to-day operations.

Moreover, SoD typically involves separating tasks into three main categories: authorization, custody, and recordkeeping. The principle is that individuals who have the authority to authorize a transaction should not be the same individuals responsible for its execution or subsequent recordkeeping.

• Authorization: This involves the decision-making process of approving or initiating a transaction. Individuals with the authority to authorize transactions determine whether the action aligns with your organizational policies, financial regulations, and business goals. They ensure that the transaction is valid, necessary, and compliant. 
  
  However, these individuals should not be directly involved in executing the transaction or handling the assets involved.

• Custody: Custody refers to the physical possession and handling of assets, such as cash, inventory, or sensitive documents. Those responsible for the custody of assets ensure their proper storage, protection, and safekeeping. It's important to separate custody from authorization to prevent any potential misuse of assets. 
  
  This ensures that the same individuals who authorize a transaction don't have direct access to the physical assets, reducing the risk of theft, misappropriation, or unauthorized use.

• Recordkeeping: This involves accurately documenting and maintaining a record of transactions and activities. Individuals responsible for recordkeeping ensure that all pertinent information related to transactions, approvals, and asset movements is accurately captured and stored. 
  
  Separating recordkeeping from authorization and custody prevents any possibility of altering or manipulating records to cover up unauthorized actions or errors.

Purpose of SoD in Enhancing Internal Control Efficacy

Let’s explore the significance of SoD in enhancing internal control effectiveness in your organization:

1. Ensuring oversight & error detection

By segregating critical tasks among different personnel, you and your teams can establish an intrinsic system of checks and balances in your organization. This division serves as a safeguard against inadvertent errors that might otherwise remain undetected in a consolidated responsibility setting. 

Through distinct roles, individuals gain a broader perspective on operations, enabling them to cross-verify and rectify inaccuracies promptly.

Consider a retail organization where a single employee is responsible for both handling cash at the cash register and managing inventory. In this scenario, errors like miscounts of cash or discrepancies in stock records could easily go unnoticed. 

However, by segregating these duties, with one employee handling cash and another overseeing inventory, errors are more likely to be caught as the two individuals cross-verify each other's work. This separation of tasks facilitates error detection, maintaining the accuracy of financial records.

2. Strengthening fraud & theft prevention

The concept of SoD acts as a formidable deterrent against fraudulent activities within an organization. By effectively distributing critical tasks and responsibilities across various employees, the prospect of collusion for malicious activities is substantially reduced. 

This strategic deployment curtails the avenues for fraudulent actions and elevates the likelihood of prompt detection. Thus, SoD is pivotal in shielding your organization's valuable assets and its hard-earned reputation.

Let’s consider a procurement department in a manufacturing firm where one individual is responsible for selecting suppliers, approving purchase orders, and authorizing payments. In such a setup, the potential for collusion and fraudulent activity is high. 

By implementing SoD, the responsibility is divided among different individuals: one approves purchase orders, another authorizes payments, and a third selects suppliers. This reduces the likelihood of an unauthorized purchase being approved and paid for, thus safeguarding against fraudulent schemes.

3. Mitigating conflict of interest

The concentration of responsibilities in the hands of a single individual can inadvertently lead to compromised decision-making or the potential for biases. By implementing SoD, you and your teams can strategically distribute tasks and responsibilities across different individuals or other teams, ensuring that no single entity has control over all aspects of a particular process. 

The primary benefit of SoD lies in its ability to bolster fairness and impartiality within an organization's operations. When duties are segregated, it becomes exceedingly difficult for individuals to manipulate or manipulate the system to their advantage. This enhances the integrity of IT processes and instills a higher level of trust among stakeholders.

Moreover, adopting SoD reflects positively on an organization's decision-making processes, as it ensures a diverse range of perspectives are considered, leading to well-rounded and objective outcomes.

For instance, in a software development company, a lead developer might also have the authority to approve code changes without oversight. This situation could lead to biased decisions favoring their own work, potentially compromising the quality of the code. 

By segregating duties, the lead developer's code could be reviewed and approved by another developer, ensuring unbiased evaluation and enhancing the overall quality of the codebase

4. Enhancing the accuracy & reliability of financial reporting

Accurate and reliable financial reporting is the cornerstone of organizational transparency and investor confidence. SoD contributes significantly to this facet by ensuring that no single individual possesses the authority to initiate, approve, and record financial transactions. 

Such segregation introduces layers of scrutiny, reducing the probability of intentional or unintentional misstatements. Consequently, stakeholders can rely on financial reports as accurate representations of an organization's fiscal health.

Consider a scenario in a financial institution where an employee handles both customer transactions and reconciliations. This dual responsibility creates an environment where errors or discrepancies could be intentionally or unintentionally masked. 

Implementing SoD by separating transaction processing from reconciliation ensures that a second individual reviews and verifies transactions against reconciled records, reducing the risk of irregularities going unnoticed.

5. Increased transparency & auditing ease

By segregating tasks and responsibilities across teams or individuals, you can establish a clear and traceable trail of activities. This distribution of responsibilities prevents single points of failure and creates an evident delineation of roles. For IT managers like yourself, this means a more comprehensible overview of who is responsible for each task within the IT ecosystem. 

Consequently, in the event of an audit, the well-defined separation of duties simplifies the process significantly. Auditors can efficiently navigate through various tasks, following the trail of responsibilities to assess your organization's compliance and risk management strategies. 

With SoD in place, identifying potential irregularities becomes more straightforward, enabling auditors to pinpoint areas that require further scrutiny and evaluation.

For example, a single individual managing patient records and billing in a healthcare organization could potentially manipulate records to facilitate incorrect billing. The organization establishes a clear trail of activities by segregating these duties, such as assigning patient record management to one employee and billing to another. This separation aids auditors in tracking the flow of information and transactions, simplifying the auditing process and ensuring transparency.

To serve the above purposes, embracing an IGA solution such as Zluri not only streamlines the integration of SoD protocols but also bolsters security and regulatory compliance. Additionally, it furnishes extensive reporting functionalities, catering to auditing necessities and adherence to regulatory mandates. Let’s find out more about Zluri and its effect on internal controls.

Utilizing Zluri's IGA Solution to Enhance Effective Segregation of Duties Enforcement in Internal Controls

Zluri's IGA solution presents a transformative opportunity to amplify the efficacy of segregation of duties enforcement within your internal controls framework. With Zluri's robust IGA platform at your disposal, you have the tools to bolster security and ensure seamless compliance with regulatory mandates.

Let’s delve into the revolutionary capabilities of Zluri's IGA solution:

Unveiling operational efficiency through Zluri's advanced discovery mechanism

At the core of Zluri's IGA solution lies a state-of-the-art discovery engine designed to offer unparalleled insights into your SaaS applications and user environment. This platform empowers your IT team to extract valuable data by leveraging five distinct discovery approaches, including single sign-on (SSO), financial and expense management, API integrations, optional desktop agents, and browser extensions.

Central to Zluri’s effectiveness is the integration of SoD principles. It is pivotal in maintaining a distinct boundary between the teams responsible for data access and analysis. The risk of unauthorized data manipulation or tampering is substantially reduced by ensuring that individuals authorized to access the data are separate from those tasked with analysis and interpretation.

Zluri's capabilities extend even further. The platform seamlessly integrates with an extensive network of over 800 SaaS applications, providing real-time data, indispensable insights, and AI-driven alerts to keep you well-informed. Comprehensive data discovery spans all SaaS applications through API-driven integrations, leaving no facet unexplored. 

Furthermore, with an expansive library housing over 225,000 apps, Zluri delves deep into the particulars, furnishing intricate access data that thoroughly grasps user permissions and access levels within your SaaS ecosystem.

Streamlining access management with Zluri's automation engine for enhanced SoD enforcement

Zluri's automation engine excels in the dynamic adaptation of permissions based on evolving roles, forming a pivotal aspect of robust SoD enforcement. This stringent approach ensures that individuals are equipped with access only to resources and functionalities pertinent to their designated responsibilities. 

Doing so minimizes security breaches stemming from unauthorized actions and regulatory alignment is seamlessly integrated to bolster compliance endeavors.

The synergy between SoD principles and access control intricacies finds a prime ally in Zluri's automation engine. During the onboarding process, Zluri's automation engine simplifies the provisioning of tailored access rights for each new team member, curbing the accumulation of unnecessary privileges that could potentially result in security loopholes. 

Similarly, during offboarding, the engine ensures the swift withdrawal of access, effectively mitigating the risks associated with ex-employees retaining entry to sensitive data or critical systems.

Streamline Onboarding with Zluri's Next-Gen Access Provisioning Solution

Say goodbye to manual provisioning and repetitive chores for your IT squad. Zluri's groundbreaking platform takes the reins, automating these tasks seamlessly, guaranteeing that authorized staff receive precise access levels to vital SaaS apps and data, slashing the chances of mistakes and excessive provisioning.

Zluri equips your IT team with a user-friendly interface, making the formulation and tailoring of onboarding workflows a breeze. These workflows empower your team to swiftly confer secure access to numerous fresh recruits simultaneously, fitting their distinct job rights, roles, placements, and divisions.

Thanks to the user-centric interface, configuring access privileges grounded in job roles and obligations is now just a few clicks away. Ditch the intricacies of access provisioning and embrace an effortless and effective fix with Zluri.

Elevate efficiency, amplify employee effectiveness, and fortify security for your users and SaaS application data with Zluri's cutting-edge workflow capabilities. Embrace the dawn of onboarding with Zluri's inventive platform.

To streamline the Onboarding process using Zluri, follow these straightforward steps:

Step 1: Access Zluri's workflow module and select "Onboarding" from the dropdown menu. Begin creating your onboarding workflow by clicking on "New Workflow."

Step 2: Select a user for onboarding; easily choose the user(s) you wish to onboard. You can manually select them or utilize the search bar to find specific employees. Simply click "Continue" to proceed.

Step 3: On the left side, explore the recommended apps and select the necessary ones for the user. Define the desired actions for each application to tailor the onboarding process.

Step 4: Customize actions further by selecting "Edit Action" and providing the required details. If needed, schedule these actions to execute on the day of onboarding. Once finalized, save the actions by clicking on "Save Task."

Step 5: To preserve the workflow for future use, select "Save as Playbook." Name your playbook in the prompted dialogue box and click "Save Playbook." Your onboarding workflow is now ready to be utilized.

Note: Experience unmatched versatility and reusability with Zluri's solution for playbooks. Effortlessly keep your playbooks up-to-date as needed, ensuring consistent efficiency throughout your onboarding journey.

Zluri's intuitive approach simplifies the management and customization of your playbooks, resulting in a seamless process that enables you to continuously refine and enhance your onboarding practices as time goes on.

Simplify Offboarding with Zluri's Next-Gen Access Deprovisioning Solution

Zluri's advanced access management solution plays a pivotal role in strengthening the enforcement of effective segregation of duties within your organization's internal controls. One of the most noteworthy features of Zluri is its automated access revocation system, covering devices, applications, and systems. This becomes especially relevant during employee offboarding, as Zluri promptly disables access, mitigating the risk of unauthorized entry to sensitive data.

This robust capability aligns perfectly with the principles of segregation of duties, preventing individuals from maintaining unnecessary access beyond their roles. With Zluri, former employees are unable to access company resources post-departure, reducing the potential for security breaches.

Furthermore, Zluri's approach includes data backup and seamless transfer, ensuring the secure transition of vital information during the offboarding process. This facilitates the proper handover of responsibilities in accordance with segregation of duties requirements.

Zluri goes the extra mile by simplifying license revocation and eliminating single sign-on (SSO) access, a proactive step that reinforces the principles of segregation of duties. This prevents ex-employees from utilizing organizational applications that may be conflicting with established access controls.

By integrating Zluri's user-friendly offboarding solution, you can ensure a consistent and secure approach to access deprovisioning, directly enhancing the enforcement of segregation of duties within your internal controls. This streamlined efficiency empowers both HR and IT teams to handle employee departures with confidence, reducing administrative burdens and aligning with the core tenets of effective internal control practices. 

With Zluri, the implementation of effortless access management aligns harmoniously with your organization's commitment to upholding strong segregation of duties, contributing to overall compliance and security.

Now, to streamline the Offboarding process using Zluri, follow these straightforward steps:

Step 1: Access Zluri's main interface and navigate to the workflow module. Select the offboarding option from the drop-down list and click "New Workflow."

Step 2: Choose the user(s) you wish to offboard by selecting "Select the user for offboarding." Once you've made your selection, click "Continue."

Step 3: Zluri provides recommended actions tailored to specific apps. Effortlessly choose from a range of suggested actions and execute them across the selected applications.

Step 4: To include additional actions, click "Add an Action." Fill in the necessary details and save the task by clicking "Save Task.".

Step 5: Finalize the workflow by saving it as a playbook. Provide a name, and click "Save Playbook," your offboarding workflow is now set and ready to go.

Note: The playbooks allow you to design workflows and define actions triggered by specific events and conditions. This empowers you to customize automation according to your organization's unique processes and needs.

The possibilities are limitless – through this automation, the offboarding procedures are elevated, guaranteeing swift and accurate access revocation.

Empowering efficient access governance with Zluri's self-service model

Zluri's IGA solution offers a tailored pathway to not only enhance SoD enforcement but also to fortify the overall fabric of internal controls. Zluri's IGA solution becomes the conduit to simplify the complexities of SoD enforcement. By embracing simplified access request management, you can unlock a more streamlined and efficient approach to managing user access, ultimately ensuring meticulous adherence to SoD requirements.

Let’s consider that you work for a large financial institution. Ensuring the security and accuracy of financial transactions is critical to prevent fraud and errors. To achieve this, your teams need to enforce SoD policies, which means ensuring no single employee has too much control over a critical process.

Incorporating Zluri's unique self-serve paradigm, epitomized by the employee app store (EAS), your teams can align their internal controls with effective SoD enforcement. The EAS empowers your IT team with a robust capability to effectively manage access requests, ensuring that permissions granted harmonize with role-based responsibilities.

The EAS emerges as a catalyst in ensuring that access requests are intricately reviewed and thoughtfully approved. This alignment with role-based responsibilities underscores the essence of SoD enforcement, guaranteeing that access permissions are tailored precisely to each employee's functional needs, consequently cementing a robust internal controls framework.

Zluri's approval system introduces a hierarchical structure that amplifies informed decision-making. This multi-layered approach, encompassing app owners, reporting managers, and IT administrators, cultivates a climate of transparency and accountability. Such an environment becomes instrumental in solidifying SoD enforcement within internal controls.

The transparency within Zluri's approval system doesn't merely stop at hierarchies. When access requests encounter denials, the system's transparent architecture fosters open communication. 

Decision-makers can provide detailed insights into the reasons for refusal, fostering an environment of understanding. This open dialogue propels effective collaboration between approvers and requestors, thereby accentuating the principles of SoD enforcement.

Integral to Zluri's IGA solution is the "changelog" feature—a beacon of real-time information dissemination. This feature keeps users continuously informed about their access requests, presenting real-time updates on approvals, rejections, modifications in licensing parameters, and administrative comments. 

Revolutionize your access reviews with Zluri's IGA

Zluri's IGA solution not only revolutionizes access reviews but also serves as a catalyst for reinforcing SoD within your organization. By embracing automation, Zluri's solution places a premium on the value of time. The once arduous and time-consuming process of SoD enforcement now flows seamlessly, liberating admins to concentrate on pivotal tasks that drive the company's overarching mission.

• At the forefront of the access review process, Zluri's IGA solution ushers in an astonishing tenfold enhancement in review efficiency. This transformative technology eradicates the need for labor-intensive manual reviews, ushering in a new era of lightning-fast access assessments that align perfectly with SoD objectives.

• By harnessing the access review capabilities of Zluri,  your team embarks on a journey towards unparalleled SoD excellence. As manual reviews become a thing of the past, the spotlight shifts to automated access assessments, creating a synergy between streamlined processes and robust SoD adherence. 
  
  This transformation empowers your team to allocate additional resources and time to the company's core mandates, fostering heightened productivity and overarching success.

• Zluri's offering encompasses unified access and automated review mechanisms that fortify security and significantly minimize the likelihood of data breaches. Central to this approach is the effective handling of user access privileges, a cornerstone of SoD. 

• With Zluri's commanding features, their IGA solution expedites access reviews tenfold and reduces manual effort by 70%, effectively refining your ability to manage access and adherence to SoD principles. 

This not only translates to streamlined operations but also to the allocation of more resources and time towards driving growth and cultivating innovation within your organization, all while ensuring a robust SoD framework.

1. Automated access reviews 

By harnessing Zluri's IGA Solution, your teams can effortlessly establish tailored review parameters, designate reviewers, and seamlessly schedule evaluation campaigns. This intelligent automation eliminates the need for labor-intensive manual reviews, saving both time and effort while significantly minimizing the possibility of inaccuracies.

But the benefits don't stop there. Zluri takes a proactive stance by incorporating auto-remediation functionalities. Upon identification of access violations, the system takes immediate corrective measures, fortifying the organization's security posture and effectively tackling potential risks, thereby ensuring compliance. The swift response mechanisms of Zluri serve as a formidable deterrent against security breaches and unauthorized access attempts.

Zluri's IGA solution also boasts a robust mechanism to swiftly revoke access for terminated employees or individuals with outdated privileges. The system's automated process ensures that access is promptly disabled, drastically reducing the chances of sensitive information falling into unauthorized hands. 

This proactive approach mitigates the risks associated with data breaches, effectively safeguarding the organization's invaluable assets.

Additionally, Zluri empowers users with auto-generated reports that deliver concise yet comprehensive insights into access reviews. These reports offer invaluable understandings of access patterns, potential vulnerabilities, and compliance standing. The generated reports serve as a powerful tool for teams to easily showcase their adherence to auditors and regulatory requirements.

2. Agile access reviews

By embracing Zluri's IGA, you and your teams gain the upper hand in managing access privileges. This is achieved through the implementation of agile access reviews, which involve recurrent certifications. This practice ensures that access privileges are subject to consistent and routine evaluations. The ongoing assessment of access rights enables the prompt identification and resolution of security vulnerabilities that may emerge.

Zluri's IGA solution takes proactive security measures a step further by orchestrating planned and scheduled certifications at specific intervals. This disciplined approach guarantees that access privileges are subject to regular and timely scrutiny. Adhering to this structured timeline significantly minimizes the chances of overlooking critical access concerns, thereby swiftly mitigating potential security loopholes.

Zluri offers meticulously crafted certificate templates that align with industry best practices and regulatory standards to simplify the certification process. These templates streamline the certification process, facilitating efficient and accurate evaluations. By harnessing these templates, organizations ensure a thorough certification procedure that remains in harmony with established industry benchmarks.

3. Real-time access reviews

Zluri employs advanced AI-driven anomaly detection algorithms to constantly scrutinize real-time access trends, user behavior, and system logs. This proactive approach swiftly pinpoints unusual or potentially risky activities, equipping you to promptly counteract security breaches and protect sensitive information. This resolute monitoring strategy fortifies your security posture, drastically reducing the potential fallout from breaches.

Zluri transcends traditional sporadic assessments, introducing a realm of ongoing monitoring and evaluations. The platform grants you uninterrupted real-time visibility into access privileges, ensuring that any modifications or potential access-related issues are promptly highlighted. This empowers you to address concerns proactively, effectively mitigating the risks of unauthorized access or improper utilization.

Zluri's AI-driven compliance capabilities offer astute insights and suggestions, guiding adherence to industry protocols and benchmarks. By aligning access controls with pertinent prerequisites, Zluri significantly curbs the chances of compliance breaches. Harnessing the capabilities of AI, Zluri simplifies the compliance journey, facilitating your organization's adherence to regulatory responsibilities.

Wondering how to automate user access reviews? Zluri’s comprehensive ‘Access certification’ module has got you covered: 

• Step 1: To automate access reviews, access Zluri's main interface and navigate to the "Access certification" module. Within the module, select the option to create a ‘new certification.’

• Step 2: Assign a name to the certification and designate an owner who will oversee the automated access reviews.

• Step 3: Choose the preferred method of reviewing user access by exploring the options: Application, Users, and Groups.

• Step 4: Opt for the "Application" review method if desired and add the relevant application(s) to be audited for users' access. 

  

  

• Step 5: Select a primary reviewer and a fallback reviewer from the dropdown menu for the automated access reviews.

• Step 6: Select the users to be included in the automated access reviews process and apply data filtering to refine the user selection based on certification requirements.

  

  

• Step 7: Proceed to the next step and configure the actions to be performed during the automated access reviews, choosing from the provided dropdown list of actions.

Note: If there are multiple applications to be included in the same certification, repeat the process of adding applications as needed.

• Step 8: Specify the start and end dates for the automated access certification process, ensuring they align with recurring or scheduled certifications.

• Step 9: Save the configuration as a template for future use by clicking on the "Save Template" option.

• Step 10: Monitor the progress and updates of the automated access review process for the specific certification by regularly checking the "Review Stage" section.
  
  Discover how Zluri's cutting-edge IGA solution can revolutionize your approach to ensuring effective segregation of duties within your internal controls. Seamlessly manage user access, ensure compliance, and fortify data security, all while navigating the intricate digital realm with confidence. 
  
  Elevate your organizational success and attain peace of mind amidst the complexities of the modern digital landscape. Ready to witness the transformation? Schedule a demo today!

About the author

Rohit Rao

Rohit works in the Community and Marketing Team of Zluri and is a strong advocate of community led growth.