ACCA Audit and Assurance (F8) Practice Exam 2026 – The Complete All-in-One Guide to Achieve Exam Success

The principle of "Segregation of Duties" is best described by the concept of distributing tasks to prevent fraud. This principle is a fundamental internal control mechanism that aims to reduce the risk of error or inappropriate actions. By dividing responsibilities among different employees, it ensures that no single individual has control over all aspects of a financial transaction.

For example, if one person is responsible for authorizing payments, another for processing them, and a third for recording the transactions, this distribution helps to create checks and balances. If a single individual were to handle all these tasks, it could lead to opportunities for fraud or mistakes without detection. Therefore, segregation of duties is crucial in promoting accountability and integrity within an organization’s processes.

This principle effectively reinforces the overall internal control environment and significantly reduces the risk of fraudulent activities and financial inaccuracies.