The Sarbanes-Oxley Act of 2002 introduced the term “separation of duties” into our vocabulary. In a nutshell, the act requires that companies take steps to ensure that different people perform critical financial tasks to discourage and detect fraud. This separation of duties is crucial to safeguarding a company’s financial health, but it can be challenging to achieve without proper planning.
Fortunately, automation can help. By automating critical financial processes, businesses can not only improve efficiency and accuracy but also gain the ability to track and audit all activities related to those processes.
What is SoD?
SoD is short for “separation of duties.” It is a security principle that requires critical tasks to be carried out by multiple individuals to prevent fraud and abuse. For example, an organization might require that someone approve a transaction before it is processed, and someone else reconciles the books afterward. This would make it more difficult for a single person to commit fraud without being caught.
Separation of duties security with Pathlock is a security solution that helps businesses automate and enforce SoD policies. By automatically separating tasks among different users and requiring approvals from multiple people, Pathlock makes it more difficult for fraud to go undetected. In addition, Pathlock’s auditing features give businesses visibility into all activities related to critical financial processes, so they can quickly identify and investigate any suspicious behavior.
What Are The Benefits Of Automation?
There are many benefits of automating critical financial processes, including:
- Improved efficiency and accuracy
- The ability to track and audit all activities related to those processes
- Reduced opportunities for fraud and errors
- Greater compliance with SOX requirements
Different Ways Automation Can Help Secure SoD
Here are five ways automation can help you secure separation of duties within your organization:
Automated Financial Reporting
One of the most critical aspects of financial management is producing accurate and timely reports. The accounting department often performs this task, which means it falls under the heading of “financial reporting.” Automating this process can help ensure that reports are generated promptly and contain accurate data. Additionally, automated reports can be audited more efficiently than manual ones, providing another layer of protection against fraud.
Automated Purchase Orders
Another critical financial process is purchasing. This process leaves much room for error and potential fraud when done manually. Automating purchase orders can help to streamline the process and reduce the risk of errors and fraud. Additionally, automated purchase orders can be easily tracked and traced, providing greater visibility into spending trends.
Invoicing is another necessary financial process that is often performed manually. This leaves room for error and potential fraud. Automating invoicing can help to streamline the process and reduce the risk of errors and fraud. Additionally, automated invoices can be easily tracked and traced, providing greater visibility into spending trends.
Keeping track of employee hours worked is essential for two reasons: first, it ensures that employees are being paid correctly; second, it provides a record of activity that can be used for auditing purposes. Manual timekeeping is prone to error and potential fraud; automating this process can help to reduce the risk of both. Additionally, automated timekeeping systems usually include features that simplify tracking and monitoring employee activity, providing greater visibility into potentially fraudulent behavior.
Automated Point-of-Sale (POS) Transactions
Point-of-sale (POS) transactions are another area where errors and fraud occur. Automating POS transactions can help to streamline the process and reduce the risk of errors and fraud. Additionally, automated POS systems usually include features that simplify tracking and monitoring sales activity, providing greater visibility into potentially fraudulent behavior.
Separating essential financial duties among employees is crucial to preventing fraud; however, doing so manually can be tricky (and insecure). Fortunately, automation can help businesses secure the separation of duties with Pathlock by improving efficiency, accuracy, traceability, and auditing capabilities. Implementing an automated solution for vital financial processes is essential in protecting your business against fraudsters.