What does segregation of duties aim to prevent?

Segregation of duties is a key internal control principle that aims to prevent fraud and errors within an organization. This principle involves dividing responsibilities among different individuals for related tasks, ensuring that no single person has control over all aspects of a financial transaction. For example, the person who approves a payment should not also be responsible for the processing of that payment. By distributing these duties, the organization creates a system of checks and balances that makes it more difficult for fraudulent activities to occur without detection. This separation not only helps in identifying mistakes but also serves as a deterrent against potential dishonest behavior, as the risk of being caught increases when multiple people are involved in oversight.

In contrast, other options like operational delays, overtime expenses, and client complaints may arise from various factors within a business but are not the primary focus of segregation of duties. The main objective is to enhance the integrity and accuracy of financial reporting, thereby protecting the organization from financial misstatements and increasing overall accountability.