ACCA Applied Knowledge · Business and Technology · Internal controls
Which of the following is an example of a detective control rather than a preventive control?
A monthly bank reconciliation is a detective control because it finds errors or irregularities after transactions have taken place. Passwords, locked stores and dual signatures are preventive controls since they stop unauthorised actions from occurring in the first place.
- AMonthly bank reconciliation performed by an employee who does not handle cashCorrect
- BRequiring a manager's password before a payment is released
- CLocking the inventory store and issuing keys only to authorised staff
- DRequiring two signatures on cheques above a set limit
Explanation
A bank reconciliation identifies differences after transactions have occurred, so it detects errors. The password, locked store and dual signatures all stop unauthorised actions before they happen, so they are preventive.
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