Authorization definition
/What is an Authorization?
Authorization occurs when a person with a certain level of authority gives permission for an action to take place. Stated differently, authorization occurs when you allow someone to do something. Authorization is a key component of the control systems used within an organization. Authorization may be given verbally, via a signature, by the use of a key or key card, and so forth.
Authorization is derived from the power vested in individuals by an organization. Typically, a person is only allowed to issue authorizations if he or she is also responsible for the outcome of the event. Thus, authority and responsibility are combined in the same person.
Related AccountingTools Courses
Accounting Procedures Guidebook
Examples of Authorization
Here are several examples of authorization in action:
A payables manager authorizes the expenditure of funds.
A human resources manager authorizes the hiring of an employee.
A materials manager authorizes the issuance of materials to the shop floor.
A system security manager authorizes someone to have access to a computer system.
A department manager authorizes an employee to be given access to the corporate network.
Authorization FAQs
Can authorization be delegated?
Authorization can be delegated if company policies allow it. Delegation must be clearly documented, specifying the scope and limits of the delegated authority. Proper oversight is essential to ensure the delegated individual acts within their authorized boundaries.
How should exceptions to authorization rules be handled?
Exceptions to authorization rules should require documented justification, specific approval, and clear time limits. Management should log the exception, define the scope of permitted action, and review the result afterward. Emergency access should be monitored closely and removed promptly once the business need has ended.