ACCA Applied Knowledge · Business and Technology · Internal controls
At the end of each month, a finance team compares the payroll bank payments with the approved payroll listing and investigates any differences. Which type of control is this?
This is a detective control. The reconciliation is carried out after the payments were made and is intended to reveal differences that have already occurred, such as errors or fictitious payments, rather than stopping them or putting them right.
- APreventive control
- BDetective controlCorrect
- CCorrective control
Explanation
The comparison takes place after payments have been made and is designed to identify errors or fraud that have already occurred. This makes it a detective control. It is not preventive because it cannot stop the payment, and it is not corrective because investigating a difference does not itself fix it.
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