Sage Intacct Feature: Segregation of Duties
It’s something that no business or organization wants to happen—yet companies, nonprofits, and other entities encounter it all the time: fraud.
According to an Association of Certified Fraud Examiners (ACFE) Report, U.S Businesses lose 5% of their revenues to fraud each year, and according to Oversight, 74% of employees report that they have observed or have first-hand knowledge of wrongdoing in their organization in the past 12 months. However, there is some good news, also from Oversight: Organizations that implement entity-wide fraud awareness training cut losses by 52%.
Whether you train your employees on ways to be more aware of fraud—and its somewhat more invasive sister, security—or try to cut down on fraud in other ways, one way to help lessen the occurrence of fraud is through the segregation of duties, one of the features in Sage Intacct. Here’s more about the feature and why it’s important.
Why is Segregation of Duties Important?
Segregating financial duties is a key principle of good internal controls—and actually a requirement of compliance through the Sarbanes-Oxley Act of 2002, a law the U.S. Congress passed on July 30, 2002, to help protect investors from fraudulent financial reporting by corporations. Also known as “SOX,” the Act mandated strict reforms to existing securities regulations and imposed tough new penalties on lawbreakers.
According to Deloitte, companies new to SOX may find it demanding in terms of time and cost to design and implement an internal control framework for compliance. Similarly, companies already complying with SOX may struggle to assess the efficiency of internal control over financial reporting (ICFR)—and to analyze the results.
Management may also struggle with implementing controls for nonrecurring or significant transactions, evaluating existing controls, and responding to deficiencies and material weaknesses.
How Sage Intacct Helps
Designating steps of your workflow to different employees will prevent the same employee from completing an entire multi-step process on their own —substantially minimizing fraud.
Chances are your organization has its own stories about fraud Maybe it’s an employee taking advantage of a company credit card or perhaps your church receptionist played Robin Hood by taking church funds and giving them to the poor. While we can’t get into the fraud triangle in this article, suffice it to say that people who commit fraud sometimes do not think they are doing anything wrong.
Regardless of your situation, larger entities will want to ensure they comply with the segregation of duties’ requirement. Due to its ERP nature, one way to do this through Intacct because the feature is built in to the software. Note: If you’re on QuickBooks, here’s an article that details how to segregate duties in the software.
Here are some examples when segregation of dues is important (source: SCH Group):
Accounts Payable: Having different users approving and paying A/P helps prevent fraud by assigning the approvals to different users, and providing additional oversight of cash disbursements.
Authorizing Payments: Prevents check fraud and Intacct’s audit trail will show who authorized a payment.
Reconciling Bank Statements: Intacct’s audit trail also will show who performed the reconciliation.
Contact us Today
Certum Solutions can help you set up Intacct, including roles and permissions. Even though Intacct is new for us, we have extensive experience implementing the same processes just like we’ve done for years with QuickBooks. Contact us today for more information.