Talking of effective risk and compliance programs, one of the things that makes for such an integral part of it is that of Segregation of Duties, SoD. Generally speaking of segregation of duties, SoD, this is essentially the process of separating the different persons who will execute the various different steps of a business transaction in an effort to curb on the imminent risks of frauds and errors within the system.
Looking at the role of SAP when we come to matters finance, we come to acknowledge the fact that SoD is such an integral responsibility for the SAP administrators and any other person who may be responsible for the aligning of SAP with the GRC.
Coming to an understanding of SoD, segregation of duties, it would be advisable that you first get to understand some bit of how businesses handle their income and expense transactions. Naturally as it happens in any system, when it comes to spending, it is a fact that there will always be a series of steps that must be followed before any monies are disbursed in an organization. Generally, this always begins with a business manager drafting a purchase order and this PO details how much a supplier of goods or services is to be paid for the service that they rendered. In order for the payment to be finally made, the purchasing department will then have to approve the vendor. And the purchase order will have to be approved by a senior manager. Then the vendor will have to provide an invoice for the services or products that they supplied for them to be finally paid. Before the check is finally signed, someone in the accounts payable department will have to approve the invoice.
Having seen all the above as the steps that are to be taken when it comes to the approval of payments, it so follows that SoD forms such a central control over financial reporting. By and large, in the event that there is no SoD, there is the odd chance that the financial reports generated may well offer some kind of invalid information. Actually, Segregation of Duties, SoD, happens to be so key and central when it comes to the need to have in place such an effective internal control system and structure in your organization. See more on this page for more on the challenges in the SAP environments and how you can go about the need to resolve the various SoD conflicts.