Question

1. Provide examples of business concerns describing the Preventive, Detective and Corrective Action with reference to Internal Control.

Answer 1

Preventive controls are design in such a manner that the prevent the occuring of mishap in the organisation in th first place

Corrective Control are designed in such a manner that to correct the irregularities or mishaps that have already taken place in the organisation

Detective Controls are designed to detect the irregularities that are present in the internal control system of the organtisation

Eg of preventive Control :Appoint security guard is a way of preventive control ( To prevent theft in the organisation)

Eg of Corrective Control :Insurance claims is an example of corrective control, when mishap alrady takes place

Eg of detective Controls :Physical stock checking ,is an example of detective control , to detect the loopholes in the internal control system