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Why Segregation of Duties is Important for Information Security

When we talk about IT security, the first things that come to mind are programs such as firewalls or malware detection software. However, security is as much about the organization systems and process your company has in place as anything else. Of those organizational structures, one of the most important matter is how companies assign responsibility for certain IT-related tasks. This is called Segregation of Duties.

What is Segregation of Duties

Segregation of Duties is an internal control that prevents a single person from completing two or more tasks in a business process. Separation of Duties, 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. Organizations require Segregation of Duties controls to separate duties among more than one individual to complete tasks in a business process to mitigate the risk of fraud, waste and error (for example in financial enterprises).

SoD processes break down tasks, which can be completed by one individual, into multiple tasks. The goal is to ensure that control is never in the hands of one individual, either by splitting the transaction into 2 or more pieces, or requiring sign-off approval from another party before completion.

Breaking tasks down prevents risks, however, it doesn’t come without other costs. For one, it can negatively impact business efficiency. Payroll management, for example, often faces error and fraud risks. A common SoD for payroll is to ask one employee to be responsible for setting up the payroll run and asking another employee to be responsible for signing checks. This way, there is no short circuit where someone could pay themselves or a colleague more or less than they are entitled to.

The Importance of Segregation of Duties

The concept behind Segregation of Duties is that the duty of running a business should be divided among several people, so that no one person has the power to cause damage to the business or to perform fraudulent or criminal activity. Separation of duties is an important part of risk management, and also relates to adhering to SOX compliance.

Segregation of Duties is recommended across the enterprise, but it’s arguably most critical in accounting, cybersecurity, and information technology departments. Individuals in these roles can cause significant damage to a company, whether inadvertently or intentionally. Therefore, finance and security leaders should pay attention to separation of duties. It is important to build a role with IT security capabilities so that no one can abuse it.

Segregation of Duties in IT security

The issue of separation of duties is of a great importance. A lack of clear and concise responsibilities for the CSO and chief information security officer has fuelled confusion. It is imperative that there be separation between the development, operation and testing of security and all controls. Similarly, if one individual is responsible for both developing and testing a security system, they are more likely to be blind to its weaknesses.

To avoid these situations, responsibilities must be assigned to individuals in such a way as to establish checks and balances within the system. Different people must be responsible for different parts of critical IT processes, and there must be regular internal audits performed by individuals who are not part of the IT organization, and report directly to the CEO or board of directors. SoD in the IT department can prevent control failures that can result in disastrous consequences, such as data theft or sabotage of corporate systems.

An important part of SoD implementation is the principle of least privilege, as well. Everyone should have the minimum permissions they need to perform their duties. Even within a certain IT system, individuals should only have access to the data and features they specifically require. Permissions should be regularly reviewed, and revoked in case an employee changed role, no longer participates in a certain activity, or has left the company.

SOD in risk management

Segregation of Duties is a fundamental internal accounting control prohibiting single entities from possessing unchecked power to conceal financial errors or misappropriate assets in their specific role. SOD controls require a thorough analysis of all accounting roles with the segregation of all duties deemed incompatible. For example, someone responsible for inventory custody can’t also oversee transactional recordkeeping regarding inventory.

SOD policies can also help manage risk in information technology by preventing control failures around access permission. By segregating workflow duties, your team ensures the same individual or group isn’t responsible for multiple steps in the access permission process.

When it comes to risk management in Governance Risk and Compliance, effective SOD practices can help reduce innocent employee errors and catch the not-so-innocent fraudulent filings. Both can elevate compliance risk by violating regulations like the Sarbanes Oxley Act of 2002, penalizing companies for filing incorrect financial information capable of misleading investors

Including a Segregation of Duties control component in your risk management strategy helps reduce risks that can be costly to your organization – whether it’s financial, damage to your brand, or the stiff penalties imposed for regulatory infractions. By segregating duties to minimize errors and potential fraud, your organization can remain at or below its desired risk threshold.  Working with experienced cybersecurity experts is crucial for companies of all sizes, across all industries. That is why businesses have to take charge of their own protection and implement strategies designed to limit the damage a single attack is capable of.

Why Is Access Control a Key Component of Data Security?

Who should access your company’s data? How do you make sure those who attempt access have actually been granted that access? Under which circumstances do you deny access to a user with access privileges? To effectively protect your data, your organization’s access control policy must address these questions, because security is an important priority for organizations of all sizes and industries

What is access control and how does it work?

The goal of access control is to minimize the security risk of unauthorized access to physical and logical systems. Access control is a fundamental component of security compliance programs that ensures security technology and access control policies are in place to protect confidential information, such as customer data. The definition of an access control system is typically based on three concepts: access control policies, access control models, and access control mechanisms. Access control systems perform identification authentication and authorization of users and entities by evaluating required login credentials that can include passwords, personal identification numbers (PINs), biometric scans, security tokens or other authentication factors. Multifactor authentication (MFA), which requires two or more authentication factors, is often an important part of a layered defense to protect access control systems.

Generally, access control solutions work by identifying a user, verifying that they are who they say they are, authorizing that they actually have access to the resource or location, and then associating their actions with their username or IP address for auditing purposes.

What are the main components of access control?

Authentication

Authentication is the first component of access control. It means determining that a user or system requesting access is who they claim to be. Authentication is typically through user ids and passwords. It’s often supplemented by a second level of authentication, using tokens delivered either to a user’s phone or smart card, or biometrics that validate a user’s physical features such as fingerprints.

Authorization

Once you’ve determined that the person requesting access is who they say they are, authorization controls determine which data and systems the user can access. In information systems, access can be defined as the ability to read, write, or execute certain data and files. This has to be determined by determining both the functions the user needs to perform and the data they need to see. Often more sophisticated rules take into effect such factors as where the user is connecting from, the type of device they are using (desktop computer or mobile phone), and the time of day they are requesting the access.

Assigning access privileges to individual users is difficult to manage and frequently results in too many privileges being granted. Role based access control (RBAC) allows privileges to be more easily managed by grouping the permissions required to perform certain functions. By assigning users the permissions identified as appropriate for their role, they can be given the minimum access required to perform their jobs.

Monitoring Access

Access requires ongoing monitoring. There are two aspects to this. First, the actual access to your networks, systems, and data needs to be reviewed to ensure that there aren’t any attempts at unauthorized access. Second, when users’ responsibilities change, the access rights granted to them need to change as well. Deleting user privileges when an employee leaves the organization is also critical. RBAC makes this review easier, because it makes clear why privileges were granted.

In addition to monitoring the access granted, you should monitor systems for vulnerabilities that allow access even when privileges are not granted. This can be done through manual reviews and automated vulnerability assessments.

What are the benefits of access control?

The benefits of strong and comprehensive access control points within your IT platform are many.

  • Cyber-based protections

The most fundamental provision of strong cybersecurity solutions (including access control) is protection against adware, ransomware, spyware and other malware. It allows you to control who gets in and who has access to what data, and mitigates the overall risk from potential threats that you may not even know about. With global ransomware costs expected to increase to nearly $20 billion in 2021, an access control program that defends your business against these threats is essential.

  • Access Controls Are Central to Zero-Trust Security

Maintaining strict access controls is also essential to the concept of zero-trust security. That’s because the zero-trust model requires users to have authorization and to authenticate themselves before they can access or modify any systems or data — and they must continue to do so to maintain said access. 

Basically, the idea here is that everything is treated as being suspicious — even when it’s something that’s coming from inside your network.

  • Customer confidence

Your customers’ confidence in your systems should be one of your highest priorities. Even the appearance of weakness or vulnerability within your cyber access controls can result in customers backing off your company or brand. Robust access controls also prevent customers from experiencing a cyber breach by proxy (e.g., cyber thieves acquire customer data and can then hack into their financial accounts).

Access control is one component of a strong information security program. PATECCO services offer a comprehensive approach to information security, utilizing firewalls, data loss prevention software, identity and access management and other controls to implement a robust defensive strategy. Contact us to learn more about the best ways to approach protecting your valuable data and systems.