Defining Internal Controls

Dual custody or dual control means that it takes two people to access the item controlled. No single person can have access to the item on their own. An example may be vault cash where it takes both a key and a combination to open the lock. One person has the key and another the combination. It takes both individuals to access the cash.

Dual custody or dual control is often confused with or incorrectly interchanged with segregation of duties. Segregation of duties means that different individuals process different parts of a transaction so that no one individual can process the transaction from beginning to end with no oversight. An example of segregation of duties is where one individual is authorized to make debit entries to a cash items account, but the account is reconciled by an individual that does not have any authority to make entries to the account.

First published on BankersOnline.com 8/07/06