Alrighty. SOD is a big term. Following is an excerpt from the AICPA website that does a pretty good job in explaining what it is and why it matters:
Segregation of Duties (SOD) is a basic building block of sustainable risk management and internal controls for a business. The principle of SOD is based on shared responsibilities of a key process that disperses the critical functions of that process to more than one person or department. Without this separation in key processes, fraud and error risks are far less manageable.
Imagine what would happen if the keys, lock and code for a nuclear weapons system were all in the hands of one person! Emotions, coercion, blackmail, fraud, human error and disinformation could cause grave and expensive one-sided actions that can’t be corrected. Or, consider the software engineer who has the authority to move code into production without oversight, quality assurance or access rights’ authentication.
Without SOD, either of these scenarios clearly shows the possibility of disastrous outcomes. As a result, the risk management goal of SOD controls is to prevent unilateral actions from occurring in key processes where irreversible affects are beyond an organization’s tolerance for error or fraud.