INTERNAL CONTROLS AND SEGREGATION OF （内部控制和隔离）.pdf

May 4, 2004 INTERNAL CONTROLS AND SEGREGATION OF DUTIES What are internal controls? An internal control system provides for safeguarding of assets, proper recording of transactions, efficient and effective accomplishment of goals and objectives, and compliance with university rules and other governance. Everyone has a system of internal controls. At home, you lock your doors to protect your assets, you record check payments and balance your bank statement to know how much money you have to spend. The effectiveness of the control system is dependent on both the controls and the people using them. If you don’t accurately record payments made from your checkbook, the likelihood of bouncing a check increases. For more information on internal controls, visit the web site for the Office of Audit and Compliance Review, (click on Internal Controls on left-hand menu). What is segregation of duties? Segregation of duties is an internal control activity to help prevent or decrease the occurrence of undetected innocent errors or intentional fraud. This is done by ensuring that no single individual has control over all phases of a transaction: authorization, custody, and record keeping. When there is a good segregation of duties, there has to be collusion between two or more employees for irregularities to occur without detection. When assigning duties, you should think about the entire transaction and whether or not a single person can make errors (either innocent or intentional) without timely detection in the course of their day to day activities or in their backup roles. If they can, then try to determine a way to eliminate the assignment of incompatible duties to an employee or to establish compensating controls. Examples of incompatible duties include: • Authorizing a transaction, receiving, and maintaining custody of the