Separation of Duties at Riordan Manufacturing

In: Computers and Technology

Submitted By jimshoe58
Words 1603
Pages 7
Separation of Duties at Riordan Manufacturing

James Shoemaker
CMGT 430
August 20, 2012
Bradley Andrews

Separation of Duties at Riordan Manufacturing
Identifying and managing risk is a key to the survival of every organization that has more than one or two people involved in the day-to-day activities. Anytime that an organization allows an opportunity for a single user to perform more than one task or function that requires checks and balances the opportunity for loss to the organization exists. The proper management of risk by the organization will at the very least minimize financial losses to the company and in most cases increase profits.
A review of the current processed in place at Riordan Manufacturing’s different locations has led to the recommendation that Riordan Manufacturing needs to establish new policies that provide for Separation of duties within the different departments of the organization. By definition, separation of duties is a key concept of internal controls and is the most difficult and sometimes the most costly one to achieve. This objective is achieved by disseminating the tasks and associated privileges for a specific security process among multiple people (Coleman, 2008).
Separation of duty, as it relates to security, has two primary objectives. The first is the prevention of conflict of interest, the appearance of conflict of interest, wrongful acts, fraud, abuse, and errors. The second is the detection of control failures that include security breaches, information theft, and circumvention of security controls (Coleman, 2008).
By establishing separation of duties policies at Riordan Manufacturing the organization will be able to reduce and possibly eliminate the possibility of loss to the organization resulting from employee theft or processing errors.
Examples of where separation of duties must be implemented…...

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