What is separation of duties? What are some limitations of internal controls?

• Separation of duties is one of the internal controls designed with the main purpose of eliminating the frauds and the errors that are performed by any employees during working in an organization. Under the separation of duties, two tasks are not allotted to the same individual, or different individuals are appointed for different tasks.
• Limitations of internal control:

1. Collusion: Collusion can occur in the business environment when two or more individuals watch the activity of each other.

2. Human error: Individuals involved in establishing and following up on the internal control system might make a mistake.

3. Management override: Any individual of the management who has the authority can override the internal control of the business entity.

4. Missing segregation of duties: Every individual has an opportunity of interfering in the other operation; therefore, no internal control can fully segregate the duties in the organization.