Video: Separation of Duties

This lesson focuses on the concept of separation of duties within an organization, emphasizing the importance of dividing responsibilities to minimize risks associated with fraud. Three key functions are highlighted: custody, authorization, and record keeping. The lesson explains that personnel should not have more than one of these responsibilities within their role, and examines the challenges of implementing separation of duties in smaller companies. Additionally, the lesson touches on issues of collusion and management override, outlining the need for additional controls to mitigate these risks. Overall, the lesson emphasizes the importance of ethical conduct, alongside the implementation of effective internal controls, to minimize fraud risks.