Ready for strategic risk management? Start with our interactive segregation of duties matrix Our Insights

A segregation of duties matrix is a structured tool used in organizations to prevent conflicts of interest, fraud, and errors by delineating the responsibilities and access rights of various job roles. This matrix serves as a critical component of internal controls and governance, risk management, and compliance (GRC) efforts. Refer to this checklist to regularly review and update the segregation of duties matrix to stay aligned with changes in your organization, processes, or regulatory requirements.

Start by identifying and documenting all key processes that need SoD controls, such as financial transactions, procurement, etc., and involve the business stakeholders in those functions. A segregation of duties matrix lets you see the full picture of entitlements and identify toxic combinations. Then you can decide if you want to re-design risky processes to add oversight or insert new steps, or re-assign roles to different people.

Access Governance Strategies SAP GRC Customers Should Consider in Their SAP S/4HANA Journey

Business and IT teams huddle over a whiteboard (and, if you’re lucky, some good takeout) and outline workflow steps in each process. If two or more activities are performed by the same actor on the same assets with the same duties, those steps can be collapsed into a single evaluation (in a single row of the matrix in step 4). In fact, from a SoD point of view, both activities detect a REC-type activity performed by the requestor, on the same asset (i.e., the plan). If there is any incompatibility with any other activity (e.g., an authorization for the same plan), a single REC activity is enough for detecting it.

Step 1: Buy-in

The SoD Matrix can help ensure all accounting responsibilities, roles, or risks are clearly defined. Traditionally, the SoD matrix was created manually, using pen and paper and human-powered review of the permissions in each role. In a fast-growing organization, a manual SoD matrix may be incorrect as soon as it’s created.

Step 3: Classify Activities as Duties

His areas of expertise include IT governance and compliance, information security, and service management. In such cases, SoD rules may be enforced by a proper configuration of rules within identity management tools. Such rules can detect a conflicting assignment in the creation or modification phase and report such violations. Roles can be composed hierarchically; in this case, simpler roles act as building blocks that must be combined to form a single role. On the downside, it is detached from the approved representation of processes, requires some preliminary effort, and may introduce errors or oversimplifications. The second alternative generates huge matrices, but keeps them aligned with the existing representation of processes and to their practical implementation.

• A segregation of duties matrix is often mapped to a business process, and assigned a risk level based on the business process and its risk as it relates to the overall risk model of the organization.
• For many organizations, it’s a daunting task to start a segregation of duties project, much less the development of an SoD matrix.
• You can be rest assured that every action, whether it’s access to sensitive data or system modifications, is tracked and accountable.
• It’s not just about boosting security; it’s also about adhering to the right protocols.
• This underscores the significance of SoD as a fundamental component in ensuring regulatory compliance with laws to reinforce organizational integrity and mitigate potential damage.
• This minimizes the risk of fraudulent transactions or unauthorized access to sensitive financial data.

Examples of Roles that Require SoD

This not only upholds the integrity of financial records but also ensures compliance with rigorous regulatory standards. You can utilize SoD to establish clear boundaries between different roles within the IT department, ensuring that personnel are focused on their specific responsibilities without the risk of conflicts of interest. Segregation of duties policy, and procedure has become a pivotal practice for organizations, particularly those aiming to uphold compliance with regulations such as the Sarbanes-Oxley Act (SOX). The enactment of SOX has mandated companies to adhere to SoD principles across a spectrum of information security standards and regulations. This underscores the significance of SoD as a fundamental component in ensuring regulatory compliance with laws to reinforce organizational integrity and mitigate potential damage.

Furthermore, we developed a solution that makes it possible to almost semi-automatically understand if a custom transaction (write but also display) has an impact on a SoD Process. With the addition of duties, a table listing all the activities would look like figure 2.

• Each user role would be rated low, medium, or high risk related to performing a particular procedure.
• By adhering to these best practices, organizations can create a robust segregation of duties matrix that helps mitigate risks, enhance internal controls, and ensure compliance with regulatory requirements.
• Following the Principle of Least Privilege helps you avoid the risk of excessive privileges, much like segregation of duties does.
• Using Role-Based Access Control (RBAC), we scrutinize roles for intra-role SoD overlaps, pinpointing conflicts within specific roles.
• It is no secret that without detailed documentation, it becomes a challenging task to explain to auditors how the matrix was developed and how it is used to evaluate user access for segregation of duty conflicts.
• Both of these methods were tested, and it was found that the first one was more effective.
• For example, someone responsible for inventory custody can’t also oversee transactional recordkeeping regarding inventory.

Maintain clear documentation of your SoD efforts, as this information is essential for audits, compliance, and demonstrating your commitment to proper internal controls. Effective SoD matrices are instrumental in preventing conflicts, fraud, and errors, ensuring a strong foundation for governance and risk management within your organization. Developing a SoD matrix is a meticulous and essential process for organizations seeking to enhance their internal controls and prevent conflicts of interest, fraud, and errors. It entails the systematic identification of job roles, responsibilities, and access rights within an organization and cross-referencing these elements to pinpoint potential conflicts. Regulatory requirements, compliance standards, and best practices guide the creation of SoD rules that dictate which combinations of duties and access should be separated. The primary purpose of the SoD model is to prevent intentional violations—unethical or criminal actions by company employees, usually for personal gain.

Automating SoD Matrix Creation with Pathlock

This enhances security and compliance efforts, ensuring prompt access provisioning and revocation. Implementing an Identity Governance and Administration (IGA) is a complete solution to streamline the implementation of proper Segregation of Duties practices within an organization. By adopting an IGA platform, you can effectively address the complexities of SoD and enhance overall security and compliance efforts. This direct approach ensures a robust defense against concentrations of risk, with a specific focus on areas prone to SoD conflicts, such as Purchase to Pay (P2P) or Order to Cash (O2C) processes. IT managers must establish sod matrix stringent policies and procedures to keep pace with ever-changing compliance standards and uphold data integrity.