Segregation of duties
An internal control that splits the steps of a financial process between different people, so no single person can create, approve and pay a transaction on their own.
Segregation of duties is the principle that the key steps in a financial process are held by different people. In accounts payable, that usually means separating who sets up or changes a supplier record, who approves an invoice, and who releases the payment. If one person can do all three, an error or a fraud can pass through without anyone else seeing it.
It is one of the first things internal and external auditors test, and one of the hardest for smaller finance teams to maintain, because the same few people often cover every role. Dual authorisation on payments and on changes to supplier bank details are the common compromises where full separation is not practical.
Segregation of duties protects against internal risk, but it does not verify what arrives from outside. Two people can correctly approve a payment to bank details a fraudster supplied. It works best alongside supplier and bank detail verification, so that the approvers are checking data that is already known to be genuine.