Explain why separation of duties is such an important procedure for safeguarding assets?

Question

and provide two examples?

Answer 1

Separation of duties is important because it insures that more than one person is necessary to steal from a firm. Collusion between two or more individuals would be necessary.  Two examples of a separation of duties follows.

1.....Division of duties in the handling of cash is one of the most effective ways to ensure control over this asset. No individual is to have complete control in the handling of cash. Specifically, there is to be a separation of duties in the actual handling of money, recording the transactions, and reconciling bank accounts. Employees handling cash are to be assigned duties that are complementary to or checked by another employee.

2.....A person other than the cashier or receivable bookkeeper is to make the bank deposit.

The following source provides good examples of internal controls necessary to safeguard various types of assets.

Source:

http://www.ofm.wa.gov/policybc/62.htm