Segregation of duties in a thirty-person factory
Small plants cannot split every role. Here is how reviewers judge compensating controls that still protect cash and inventory.
Textbook segregation assumes a deep bench. A thirty-person metal shop near Taichung rarely has separate receiving clerks, AP clerks, and inventory accountants. That does not excuse unchecked access—it changes how compensating controls must work.
Combinations that raise the temperature
The combinations reviewers flag most often are:
- The buyer who also sets up vendors and approves invoices
- The warehouse supervisor who adjusts stock and authorizes scrap
- The payroll clerk who also edits employee bank details without a second review
Any one of these can be survivable with detective controls. Two together usually need redesign.
Compensating controls that hold up
Monthly owner review of vendor master changes, forced vacation for the AP lead with temporary cover, and exception reports for inventory adjustments above a threshold are examples that auditors tend to accept when sample evidence shows they actually run.
What does not count
A policy binder nobody opens, a rubber-stamp “review” on every invoice, or an ERP access right that was never revoked after a promotion. During walkthroughs we ask to see the last three months of evidence—not the intention.
Small factories can keep strong internal controls. They just cannot pretend every duty is split; they must prove the monitoring that replaces the missing split.