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ACCA Strategic Professional · Strategic Business Leader · Internal control and management reporting

At Korvan Logistics, a warehouse system automatically blocks the dispatch of any goods for which no approved sales order exists in the system. Which type of control is this?

It is a preventive control. The system blocks dispatch where no approved sales order exists, so the unauthorised transaction cannot occur at all. A detective control would only identify the problem after dispatch, and a corrective control would fix it afterwards.

  1. ADetective control, because it identifies unauthorised dispatches after they occur
  2. BPreventive control, because it stops an unauthorised transaction from being processedCorrect
  3. CCorrective control, because it repairs errors in sales orders
  4. DDirective control, because it instructs staff to follow the dispatch policy

Explanation

The system stops dispatch before it happens, so the error or unauthorised act is prevented. A detective control would report exceptions after the event, for example a reconciliation of dispatches to orders. It is an automated, application-level control rather than a directive instruction.

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