ABSTRACTSegregation of tasks is an important factor in the determination of internal control system reliability. In assigning tasks within an organization, the impact on internal control system reliability must be considered. This paper uses reliability modeling as the basis of a method for formulating the design problem. Formulation of the problem in this manner facilitates development of a knowledge base for auditors' judgments and the use of such knowledge in the design problem. It is demonstrated that under certain conditions the problem can be solved easily. This is useful not only in task assignment but also in manpower decisions. New concepts such as reliability degradation and a task combination matrix are introduced in developing the formulation.