Segregation of duties is another name for separation of duties, the internal control principle that no single person should control all stages of a transaction. The key functions that are kept apart are authorizing a transaction, recording it, holding custody of the related assets and reconciling the records. The main entry explains the principle, examples and compensating controls in detail.
How the term is used
Segregation of duties, often abbreviated SoD, is the wording most commonly used by auditors, internal control frameworks and IT security teams, while separation of duties is common in textbooks and general business writing. Both describe the same safeguard against fraud and error: if one employee can approve a supplier, enter its invoices and release payments, that person could create a fictitious supplier and pay themselves without detection.
In public companies, auditors review segregation of duties as part of testing internal control over financial reporting under standards set by the Public Company Accounting Oversight Board (PCAOB). In information systems, the same idea is enforced through role-based access control, where user permissions are designed so that conflicting tasks cannot be performed by one account, and through maker-checker approval steps in banking and payment systems. Small organizations that cannot fully segregate duties rely on owner review and other compensating controls.