What is the primary purpose of segregation of duties in an organization?

The primary purpose of segregation of duties is to prevent fraud. This practice involves dividing responsibilities among different individuals in an organization so that no single person has control over all aspects of any significant transaction or process. By ensuring that multiple individuals are involved in critical tasks, such as authorizing transactions, recording them, and maintaining custody of assets, an organization can create a system of checks and balances.

This systematic approach minimizes the opportunity for any one individual to commit and conceal fraudulent acts. For instance, if one person is responsible for both initiating and approving transactions, it introduces a risk of manipulation or fraud. By separating these functions, the organization builds a safeguard against potential misuse, thereby enhancing its overall security posture.

The other options relate to aspects of operational efficiency and compliance, but they do not capture the essence of the primary purpose of segregation of duties as clearly as fraud prevention does. Employee monitoring and reduced supervisory requirements focus on management oversight rather than on risk mitigation. Enhanced compliance can be a benefit of having segregated duties but is not the main driver behind this practice, which is primarily aimed at deterring fraudulent activities.