ACCA Applied Knowledge · Business and Technology · Internal controls
Which one of the following is an example of a detective control rather than a preventive control?
Investigating monthly variances between budget and actual expenses is a detective control, because it happens after the costs have been incurred and highlights unusual results. Segregation of duties, passwords and locked stores all act beforehand to stop problems occurring, so they are preventive.
- ASegregation of duties between ordering and receiving goods
- BRequiring a password to access the payroll system
- CInvestigating variances between budgeted and actual expenses each monthCorrect
- DLocking the inventory store and issuing keys only to storekeepers
Explanation
Reviewing budget-to-actual variances takes place after costs are incurred and highlights unexpected results, so it detects problems. Segregation of duties, passwords and physical locks all restrict action beforehand and are preventive.
Did you get it right without looking?
One question tells you little. A timed set on Internal controls shows your real accuracy, how long you take and where you lose marks.
More Internal controls questions
- A company wants to ensure that its accounting system keeps a record of which user posted or changed each transaction and when. Which feature…
- Marlow Co is deciding whether to set up its own internal audit department or outsource the function to an accountancy firm. Which of the fol…
- An online order form rejects any entry where the quantity field contains letters or a negative number. Which type of application control doe…
- In a small retailer, the same employee orders inventory from suppliers, receives the goods into the warehouse and records the receipt in the…
- Which of the following is a key difference between internal audit and external audit?
- A warehouse holds high-value electronic components. Management wants to reduce the risk of theft while still allowing staff to do their jobs…