Separation of Duties

Separation of duties is a concept used in many industries and can be one of the best safeguards when it comes to managing risk.  The principle was developed in accounting to control financial decisions and transactions to reduce the risks of error, deficiency, inaccuracy, irregularity, and corruption among personnel. At its core, Separation of Duties is all about ensuring different people within the organisation are responsible for completing different components of a task. No single individual person should have responsibility for completing the entire task. In this article, we will explain the concept of Separation of duties as it relates to cyber security and why it can be an important piece of any organisation’s security program.

What is the Separation of duties?

Separation of duties, sometimes known as Segregation of duties, is most commonly found in the finance industry as a risk management control built for the purpose of preventing fraud and error in financial transactions. As it relates to the information security industry, it plays an equally important role in managing risks. Separation of duties (SOD) is an essential component of an effective risk management strategy and focuses on two primary objectives. The first is the prevention of wrongful acts, fraud, abuse and errors by an individual. The second is the detection of control failures that include security breaches, information theft and circumvention of security controls.

The principles applicable to the separation of duties are:

  • dividing activities into different steps that can be performed by different people. (e.g., request, authorize, approve and enforce access rights)
  • Implementing a two-step approval process. Two people are required to approve a process before it can be completed.
  • Spatial separation application when different activities are carried out in other places. (e.g., places to pick up and store raw materials)
  • Factorial separation is applied when several factors contribute to the completion of the activity. (For example, two-factor access authentication).

Why is Separation of Duties is so Important

Prevents Inside Attacks

When you work in a team environment, even though you trust your team members, the chances of a cyberattack that originates from inside the organization are always a possibility. Implementing a proper SoD plan will help you greatly reduce the possibility of an inside attack from internal threat actors. With checks and balances in place, other team members should be able to spot clues that reveal the possibility of an inside attack.

Prevents the easy execution of high-level network duties

Members of the I.T team and especially the security team have the most privilege when it comes to network and systems permissions. As a downside, they pose the most risk. If threat actors are able to steal the credentials of one of these powerful team members, they could take full advantage of their newfound access, doing significant damage to the network and stealing significant amounts of sensitive data. An implemented SoD plan can limit the amount of damage the threat actors can accomplish before you discover the intrusion. By splitting up the duties of the security team among several different people, no single team member has unchecked power over the network and the organization’s data.

SoD is important for compliance

Separation of duties inherently improves security compliance as it removes the possibility of single-source control and encourages internal process evaluation. Separation of Duties also allows you to detect and address violations early, including those regarding specific practices, like SOX or GDPR, to avoid more significant issues moving forward.  Practising continuous audit is crucial for effective implementation. With the proper software tools and processes such as SoD risk analysis and detailed audit controls, organizations can anticipate possible violations and identify unseen violations quickly and efficiently.   

Improves employee accountability and work environment

Separation of duties ensures that no one person gets burned out, thus causing attrition. It also helps the business management team know where there are strengths, opportunities, or gaps that may require additional training or staffing. This division of responsibilities assures that your employees are not burdened with huge workloads, and you are providing a stress-free environment.

Problem with the Separation of Duties

A problem with the separation of duties is that it is much less efficient and more time-consuming than having a single person be responsible for all aspects of a transaction. Thus, you should examine the tradeoff between increasing the level of control and reducing the amount of efficiency when deciding whether to implement separation of duties in some areas. It is quite possible that the improvement in control is not sufficient to offset the reduced level of efficiency.

Closing

Separation of duties is a powerful internal control that is crucial for every business. Its objective is to ensure that duties (roles) are assigned to individuals in a manner so that no one individual has complete control over the system. It prevents hidden fraudulent behaviour and sets a standard for clear responsibilities.

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