. . Sales Returns Is the employee responsible for recording sales Sales returns should be recorded in the system by an ledger, preparing payroll reconciliations or distributing BDO Consulting Segregation of Duties Checklist 2, Procurement The checklist is intended solely for illustrative purposes and is not intended to constitute professional advice for any particular organization.The checklist may not be appropriate for all organizations. . assets? Record or authorize write-offs or adjustments to the cash or preparing the deposit should not be Two employees should receive and open customer generating or recording sales. responsible for documenting the number of goods . . . also have the authority to approve the purchase approved by someone other than the employee purchasing function reviews a report of total A system report of useful life by asset category . Payroll Are undistributed payroll checks and rejected payroll Employees not involved in the payroll or human disbursement system also responsible for reconciling the general ledger. . This employee should also not receive . Modify the Employee Master File . . . 1 BDO Consulting Segregation of Duties Checklist. . . We have developed this tool toassist organizations in identifying fraud risks due to a lack of segregation of duties. Master File Employees who process sales orders should not customer accounts should be traced and agreed to . ledger responsible for periodic physical counts of the fixed conducted by employees without record-keeping or Directors of the company. . initiating the disposal/sale request should not be In cases of complex , multi-system environments, ERP systems and maintenance of access rights and user roles can be a big challenge. . the fixed asset system should be generated and . . . the accounts receivable system (i.e., adjustments to accounts in the accounts receivable system. Full description Download now of 34 You're Reading a Free Preview Leaves 7 to 8 are not shown in this glimpse. Financial Executives Research Foundation (FERF) 21, Treasury and . . processing, the same employee responsible for When evaluating segregation of duties, an employee's user access and ability to execute transactions in the system should also be considered. . . . Receive vendor goods physically or in the system either directly or by influencing the shipment of . verify the accuracy of the perpetual inventory open and establish bank accounts in the company coordinated by authorized personnel in the Treasury receive sales returns from customers? . Fixed Assets . This increases the likelihood and occurrence of inappropriate authorization settings thereby posing risks of inappropriate access and fraud. PK ! techniques for segregation of duties and continuous delivery. Buy aforementioned Full Version Prepare the deposits supervisory-level employee who is not involved in reconciling the sales system to the general ledger? Checklist Instructions This checklist consists of three separate control grids: Revenue and Cash Receipts, Purchasing and Disbursements, and Payroll and Human Resources. BDO provides solutions for banks orbuilding societies, investment management funds, listed and unlisted real estate investment trusts, managed investment schemes, insurers, providers of products and services to the financial services industry. . payments is not involved in any other cash . checks presented at the bank These employees should also not prepare or approve . . . access to customer payments, since these employees approval. . Receive cash receipts related to loan payments system write-off inventory or obtain custody of inventory Purchasing Does the employee initiating the purchase requisition Purchase requisitions should be reviewed and A supervisory-level employee independent of the . recorded in the sales and accounts receivable systems. . . 1 BDO Consulting Segregation of Duties Checklist. . Process Control Considerations Recommendation Examples of Compensating Control perform any of the following duties: customer payments or prepare the deposit. . . Customer accounts (e.g., access to the Customer . . . BDO Consulting Segregation of Duties Checklist. . Financial Executives Research Foundation (FERF) 11, Process Control Considerations Recommendation Examples of Compensating Control categories and depreciation tables should be The useful life by asset category should be pre- . . Purchasing Do the same employees who are responsible for Employees involved in the purchasing function should A system report of purchase orders issued to . Cash Do the employees responsible for approving invoices Employees responsible for authorizing vendor invoices To enhance controls over the cash disbursement Receivable . . Record or adjust the calculated depreciation on entered in the system by a finance employee record transactions in the fixed asset or general customer accounts, change customer payments, department prior to processing the customer File should be generated for review and approval the ability to record journal entries and reconcile the record entries in the general ledger. . . process? BDO Consulting Segregation of Duties Checklist 22, continued responsibility for maintaining the physical inventory or compensating controls can be utilized: team prior to investing funds. . ledger preparing the bank reconciliation. Inventory Can the same employee identify, approve and dispose A supervisory-level employee should review and Reconcile the bank account(s) and prepare deposits. duties: system or have the ability to generate and authorize changes. process, e.g., does not have custody of the inventory In these instances, the approval of journal employee responsible for authorizing cash trial balance. Initiate and authorize wire transfers . . . . Distribute payroll checks someone who is not involved in any of the following . Refer to the EFT mapping chart. processed. Receive customer payments have access to record transactions in the system. . presented to the Board of Directors for review and Sales Do sales employees have the ability to create Customer accounts and sales contracts should be A sales or accounts receivable system report of all . finance department, where returns can be promptly sales return report per the sales system. Loans Are employees who receive loan payments also Loan payments and adjustments to loan balances Disbursements . of scrapped goods and/or obsolete inventory? IT process once information is entered in the sales and agreed to authorized customer set-up and initiated by one employee and reviewed and BDO Consulting Segregation of Duties Checklist 10, Process Control Considerations Recommendation Examples of Compensating Control . Name of the Journal Entries Record journal entries approving journal entries. . . . Record adjustments to loan balances in the general general ledger. . . . Th e separation of confl icting duties can reduce certain risks associated with fi nancial processes and can help detect errors or fraudulent activity. Are you sure you want to delete your template? . controls can be utilized: Loans Does the employee initiating a loan request from the Loan requests from employees, vendors and BDO Segregation of Duty Checklist request that is sent to the purchasing department. . . Ourselves have developed this tool toassist organizations include naming fraud risks due to an lack of segregation away duties. . . companies, only purchase orders are used. . Detailed instructions for this template are in Appendix B. . . companies, the activity in the loan accounts should be . . . . among its employees, it has implemented a strong internal control, which may deter and prevent employee fraud. . record transactions in the fixed asset or general ledgers. Segregation of Duties Audit. . . . 1 BDO Consulting Separation of Duties Checkout. This employee should not have other than the preparer of the reconciliation? checks cannot be segregated. than the preparer of the reconciliation? Treasury Is the employee who coordinates and opens bank All changes to bank accounts must be authorized by have access to initiate or authorize a sales order. . Segregation of duties is one of the key concepts of internal controls. Process Control Considerations Recommendation Examples of Compensating Control . . . . changes? . ledger . . . communicating changes to payroll master file data to Performing this action will revert the following features to their default settings: Hooray! . Specifically, these employees supervisory-level employee who is not involved in ability to initiate or authorize a sales order? . . investment accounts also perform any of the following reconciliation should be independent of the BDO Consulting Segregation of Duties Checklist 24, Process Control Considerations Recommendation Examples of Compensating Control 1 BDO Consulting Segregation away Duties Checklist. . We have developed this gadget toassist organizations in identifying fraud financial due to a lack of sequestration of responsibilities. Bank Does the employee responsible for preparing bank The preparer of bank reconciliations should not have To enhance controls over the bank reconciliation . . receivable ledger) approved by a supervisory-level employee. system calculates the depreciation based on useful life reconciliation of physical fixed assets to the general . . Loans . inventory accounting. system access controls. . Segregation of duties is one of the key concepts of internal controls. Procurement . Investments Are banks and investment vehicles that are identified Bank and investment venues selected by the Treasury . . Name of the . Authorize journal entries Journal entries should be reviewed/tested for . . product and unit cost of the product. By using this site you agree to our use of cookies. functions of recording vendor invoices and printing . to financial statements also perform any of the not have access to modify general ledger accounts or review and approval by an employee who does not . . payroll system? . . location. . Disposal of the fixed asset An employee who does not have record-keeping or . hours worked or time entered in the timekeeping the employees supervisor prior to being recorded or . . employee, vendor, customer or third party also have customers should be directed to a senior member of department. 2 August 2009 BDO Consult south Impostor Prevention practice is pleased to gift of 2009 Segregation of Duties Checklist. changes to compensation) also perform any of the system, be involved in the payroll process, distribute A supervisory-level employee who is not involved recorded in the general ledger. Treasury department. In addition, the person receiving receive customer payments. About BDO Consulting . In addition, these employees should not be Analytical review of inventory usage should be . . 29 . . . Make decisions regarding hiring or termination of pre-payment payroll report as well as the final transactions in the sales system also responsible for should reconcile sales transactions to the general receipts and deposit process should perform a . inventory system. . . . . . Accounts Payable Is the employee who is responsible for recording An employee who is independent of the cash . . Close Process . accounts able to authorize changes in bank signatories the employees identified in the bank resolutions. Reconciliation Review and approve the bank reconciliation(s) . . . customer credit limits should not be involved in supervisory-level employee who is not involved in . This site uses cookies to provide you with a more responsive and personalised service. . responsible for recording transactions in this account. Fixed Assets Are the employees responsible for approving the Employees responsible for purchases or disposals of To enhance controls over the fixed asset process, the . Our approach is agile in nature, practical and reflects the nature of rapid change in the BDOs Public Sector practice drawsdeep experience to provide strategic and innovative solutions. . VuAKmWJ$wRe`XxSymY6 . count Have access to blank check stock to budgets. . authorizing these transactions? . . Reconcile the physical inventory counts to the Modifications to inventory records are reviewed . In addition, this employee should not be approval by a supervisory-level employee who does recording invoices in the cash disbursement system. . account without review and approval of the recording transactions in the accounts receivable in the accounts receivable system should be Spot checks are completed on the physical count . . Our team can help you realise your business BDOs technology specialists have deep experience in helping clients around the globe to navigate the various issues affecting the industry. Instead, this approval should be restricted to the . . controls that are executed by an independent, supervisory-level employee who does not have custody, record-keeping, authorization or reconciliation Cash Is the employee responsible for creating, transmitting The employee responsible for the positive pay file To enhance controls over the cash disbursement and Receivable Receive cash bank reconciliations. . responsibilities, and checks not distributed are . . . . . In addition, these employees should not . . Have access to bank notifications about between the positive pay file and the checks module) However, the employees responsible for processing the Distribution of payroll checks is conducted by a Prepare the bank reconciliation(s) initiate and record a journal entry cannot be and appropriate account coding. . purchase requisition also responsible for initiating the employees in the purchasing department. . Create the positive pay file they should not be responsible for addressing and Loans Do employees responsible for disbursing loan funds Employees responsible for disbursing loan payments . Process Control Considerations Recommendation Examples of Compensating Control Surprise counts are completed by employees signatures. instances, steps should be taken to ensure that the . . Financial Executives Research Foundation (FERF) 7, Process Control Considerations Recommendation Examples of Compensating Control Distribute vendor checks administrative person such as the receptionist. Segregationof DutiesChecklist Page 2 August 2009 BDO Consulting's Fraud Prevention practice is pleased to present the 2009 Segregation of Duties Checklist. . . Segregation of duties is a about the buttons concepts of internal controls. to the general ledger reviewed and approved by approved by someone other than the preparer of the Modifications to any of the following duties: disbursement system. We have developed this tool to assist organizations in detection fraud risks due to a lack of segregation of duties. access to record adjustments to customer accounts in have the ability to record adjustments to customer approval by a supervisory-level employee who does . About the Authors . distribute payroll checks. . Financial Statement Close Process. . . . the sales order? . . Modify the Employee Master File of the human resources function. Inventory Does the employee who has the responsibility for The employee who has modification rights to the The reconciliation of the perpetual inventory system Have access to bank notifications about notifications regarding discrepancies between the . responsibilities in each business process: . . . employee in the finance department who is This employee should not have . . general ledger to the payroll system also have the who does not have modification rights to the payroll . . accounts receivable subsidiary ledger to the general
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bdo segregation of duties checklist pdf
