Preventative and Detective Controls
Preventative Controls: You will recall that internal controls are actions taken to make sure the right things happen and the wrong things don't. There are two types of internal controls: preventative controls and detective controls.
Preventative controls are designed to keep errors or irregularities from occurring in the first place. They are built into internal control systems and require a major effort in the initial design and implementation stages. However, preventative controls do not require significant ongoing investments.
Detective Controls: Detective controls are designed to detect errors and irregularities, which have already occurred and to assure their prompt correction. These controls represent a continuous operating expense and are often costly, but necessary. Detective controls supply the means with which to correct data errors, modify controls or recover missing assets.
» Basic Definition
» Internal Control Program
» Internal Control Foundations
» Segmentation
» Risk Assessment
» Preventative and Detective Controls
» Internal Control Standards
» Who's Responsible and For What?
» Training
» Summary
» Related Informational References
