Home > Uncategorized > Separation of Duty or Conflict of Interest – by example

Separation of Duty or Conflict of Interest – by example

In Separation of Duty (SoD) or Conflict of interest, it may take more than one person to craft a fraud which makes fraud difficult and unintentional error less frequent. Here are some example of them. Examples are collected all over the places I came across when reading research papers, blogs and so on. Some of the examples are very similar.

  1. the same user should not set the price of a specific item and also be a customer for that item (the employee can either set an unusually low price or damage the item before buying it at a reduced price, thus committing fraud). [1]

  2. One who issue the paycheck, cannot approve it.

  3. Two different keys (belonging to different persons) are required to open a safe.

  4. No employee should be responsible for both recording and processing a transaction.

  5. Someone who works a cash register or books checks received in the mail should not also be tallying accounts receivable in the company’s financial reports.

  6. A purchasing agent may have the authority to bind the company to purchase orders up to a specific amount. Their supervisor should be required to approve purchase order over that amount. After the product is received, the accounts payable clerk matches the purchase order, bill of lading, and invoice before payment is made.

Ref:

[1] http://www.matunda.org/wp-content/uploads/2006/12/p3-nyanchama1.pdf

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