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Segregation of Duties, SoD, Risk Management and How it Impacts on Compliance

RiskManagementsolutionNov 22, 2019, 7:34:01 PM

When it comes to effective risk and compliance programs, Segregation of Duties, otherwise known as SoD, happens to be one of the key components of these. In a nutshell, SoD, segregation of duties basically involves the separation of the persons who are tasked with the responsibility of executing the various steps in business transactions in a bid to reduce the risks of errors and frauds within the system.

Factoring the role that SAP plays when it comes to finance, it so follows as a fact that SoD is such an integral responsibility of any SAP administrator and any other person who may be tasked with the aligning of SAP with the GRC.

In order to understand SoD, segregation of duties, it is important to first have a clear understanding of how businesses process income and their expenditure transactions. As we would naturally have it, when it comes to matters of expenditure, there will obviously be a series of steps that have to be followed prior to the release of funds in an organization. Generally, this always begins with a business manager drafting a purchase order and this PO details how much a supplier of goods or services is to be paid for the service that they rendered. This is then followed by a need for the same to be approved by the purchasing department for the vendor to be paid. This payment will often not be disbursed until the purchase order is finally approved by some higher ranking official in the business, in most cases a senior manager somewhere. At the end of all these, the vendor has to provide an invoice for their products or services rendered for which they demand payment. At the tail end, there is the need for the invoice to be approved by someone in the accounts payable department before this cheque is finally paid. Check out sod matrix for the best SOD services or view here for more details.

Looking at the above described process when it comes to the approval of payments in an organization, one thing that happens to come out as clear is the fact that SoD is such a central control when it comes to financial reporting. As a matter of fact, in the event that there is no SoD, chances are so high that the financial reports that may be generated and produced at the end of the day may not offer you as much valid information. Actually, Segregation of Duties, SoD, happens to be so key and central when it comes to the need to have in place such an effective internal control system and structure in your organization. Here is more on the challenges in the SAP environments and your way around the need to resolve the various SoD conflicts. You can read more on this here: https://www.huffpost.com/entry/how-taking-managed-risks-_b_7848682.