Question

Think to a position that you have held at either your workplace, or volunteer organization.. Compare the following three types of controls: preventative, detective, and corrective. Give two examples of each type of control that you have experienced. Of the three, in your opinion which one do auditors usually focus on more in an audit?

Answer 1

Ans :- 1) Preventive control helps to prevent undesirable events from occurring.They are proactive controls that helps to prevent a loss.

Examples of preventive control are :-

a)Separation of duties

b)Adequate documentation

2) Detective Control - A detective control is designed to locate problems after they have occurred.

Examples are :-

a) Physical inventory count

b)Bank reconciliation

3) Corrective control :-Corrective controls are designed to prevent errors and irregularities from reoccurring once they are discovered.

Examples are :-

a)Training employees on new policies

b) Positive discipline to prevent employees from making future errors and continuous improvement