Video: Separation of Duties

In this lesson, Nick Palazzolo, CPA, takes a deep dive into the principle of separation of duties, an integral part of effective enterprise risk management (ERM). Highlighting the inherent risks when duties are not appropriately separated, he reiterates the necessity to disperse responsibilities related to record-keeping, custody, and authorization among different individuals to mitigate fraud and error. Nick candidly discusses how collusion and management override can disrupt this separation, and why additional controls are crucial, especially in smaller companies where roles may necessarily overlap due to limited staff. Throughout the lesson, he draws parallels with ERM content, stressing the delicate balance of risk versus reward in implementing these controls.