Are SoD policies able to stop unauthorized actions from happening?

Separation of Duties (SoD) policies play a crucial role in an organization's internal controls by mitigating the risk of fraud and errors. While these policies are primarily designed to be detective, they can have a preventive effect under certain conditions.

SoD policies aim to separate critical functions among different individuals to ensure that no single person has control over all aspects of any significant transaction. This division helps detect any unauthorized actions that may occur, as it becomes more challenging for a single individual to commit fraud without others noticing, thereby acting in a detective capacity.

Although SoD policies can serve as a deterrent against unauthorized actions and can sometimes prevent them from occurring—especially when enforced rigorously—they are not foolproof. They can be circumvented if proper oversight and monitoring are not in place. Thus, while they might reduce the likelihood of unauthorized actions, they do not entirely eliminate the risk unless they are accompanied by robust supervision and monitoring measures.

Therefore, stating that SoD policies are primarily detective reflects their true nature in the context of broader risk management practices, emphasizing that while they can help prevent unauthorized actions, their main function is to detect discrepancies and irregularities when they occur.