Internal controls and segregation of duties
A control is not a written procedure but something that stops an error or finds it. The difference between the two is the difference between a business that discovers its own problems and one whose auditor discovers them for it.
Built forAn accountant who needs a concise treatment that can be applied and traced
When you need it
A control is not a written procedure but something that stops an error or finds it. The difference between the two is the difference between a business that discovers its own problems and one whose auditor discovers them for it.
The decision it supports
Start with “Preventive and detective”, then use the explanation to choose the next treatment or check.
What you receive
Work note: Internal controls and segregation of duties
A structured explanation, every official rate with source and review date, then a direct path to a lesson, tool or track.
An example you can inspect
Apply the decision: Preventive and detective
Preventive stops before the fact: holding an invoice from payment until it passes the match, refusing a duplicate invoice number, approval limits by amount. Detective finds after the fact: the supplier statement reconciliation, a review of unusual payments, a surprise count.
Continue the workflow
- The Internal Auditor trackAvailable now
- Lecture: control types and segregation of dutiesAvailable now
Preventive and detective
Preventive stops before the fact: holding an invoice from payment until it passes the match, refusing a duplicate invoice number, approval limits by amount. Detective finds after the fact: the supplier statement reconciliation, a review of unusual payments, a surprise count.
Preventive is cheaper because the money has not left yet, but detective is never dispensable: every preventive control has a gap, and the most dangerous are those opened by a legitimate override permission.
Segregation of duties
The rule is that no one person completes a full cycle unreviewed: whoever creates the supplier neither approves its invoice nor executes its transfer. All three in one pair of hands makes the control cosmetic, however carefully written.
In a small business full segregation may be impossible, so it is offset by compensating controls: a periodic review by the owner, and bank statements delivered to somebody other than whoever executes payments. The compensation is documented rather than assumed.