Segregation of Duties and COVID 19

This pandemic has resulted in job losses and this has considered to be one of the immediate and severe impact of COVID 19. As per the Centre for Monitoring Indian Economy around 60 million people in the age group of 20-40 years lost their jobs in April 2020. This has logically resulted in adding up job responsibilities upon an individual and an ideal segregation of duties scenario has been hindered.  

Segregation of duties is the concept of having more than one person required to complete a specific task and roles of each person is appropriately defined and documented.

In business the separation by sharing of more than one individual in one single task is an internal control intended to prevent fraud and error.

Due to limited manpower the principal of segregation of duties get violated as a single person has more roles and responsibility revolving around and is responsible for end to end work.

Risk due to lack of segregation of duties:

  • Business within business kind of scenario occurs as important roles and powers are vested with a single person
  • Unidentified frauds may take place and it would rationally be impossible for them to come in the eyes of the Company’s management.
  • These are kind of businesses that run on trust basis rather than ideal business philosophies and hence unearthed risks revolve around it.

Current scenario of work and Segregation of duties:

Most of the companies are working remotely due to the pandemic. If segregation of duties is not sufficient and override of controls scenario occurs this will hamper the efficient working and progress of any organization.

  • Cost cutting techniques must be planned and initiated like cross department and inter department reviews.
  • Transparency of performance and reporting of the same at each level of hierarchy.
  • A monthly report of roles performed and approval rights established can be noted down and presented to the senior level managers.
  • Creation of common platform for approvals of key financial decisions, this will enable utmost transparency and robustness.
  • Performing periodic reconciliation of applications and an independent verification process

Each organization depending upon its size and key risk areas must have ideal segregation of duties and the same must be documented and approved. And during current whiles of pandemic, periodic reviews and reconciliations of processes and transactions can aid in reducing and disabling probable risks.

-Pavitra Jain, Senior Auditor – ShineWing India