ITPEC IP April 2020 Question 71

The rule defining the role, responsibilities and authority of each department and employee — separation of job duties is put into effect by writing down who does what and who may approve what.

Separation (segregation) of job duties is an internal control that gives incompatible tasks, such as ordering, approving, recording and paying, to different people so that they check one another and no one can both commit and hide an error or fraud. A company carries it out through its rules on the division of duties and on job authority: each department's and each person's role, responsibilities and authority are defined there, so the separation is explicit and can be audited.

Answer (b)

Why not others:

• •(a) — rules on the management organization set up the company's structure of bodies and departments, but not the split of individual roles and authority that separates incompatible tasks
• •(c) — rules on working conditions and employment are the work rules (hours, pay, leave), not a separation of duties
• •(d) — rules on proper conduct under laws, regulations and social norms are a code of conduct for compliance

Key rule: Separation of duties works only when roles and approval authority are written down and assigned to different people, so the rule that defines them is its basis.

System Audit · AI-written, may contain errors