The more negotiable the asset, the greater the need for proper separation of duties - especially when dealing with cash, negotiable checks and inventories. While a cashier's office is thought of as the place where segregation of duties is essential, this is an issue that should be of concern to any department that accepts funds, has access to accounting records, or has control over any type of asset. When someone is able to misappropriate funds due to lack of proper segregation of duties, the irregularity may be discovered when they go on vacation. This is one reason that taking vacations may be considered an internal control. Separation of duties will only limit the possibility of problems arising due to incompatible duties.
Collusion can occur, invalidating the control procedures in place.
There is a risk involved when one person has a thorough knowledge and understanding of the total system and when they have access to the entire computer system. Therefore caution should be exercised in selecting individuals and areas for cross training. Separation of duties is more difficult to achieve in a centralized, computerized environment. Segregation of duties is also a critical issue in a computer center, but that specialized area is not here. In a small operation, management may need to take a more active role to achieve separation of duties.