Which of the following is an example of a preventive control?
A) approving customer credit prior to approving a sales order
B) reconciling the bank statement to the cash control account
C) counting inventory on hand and comparing counts to the perpetual inventory records
D) maintaining frequent backup records to prevent loss of data

Question

Quizplus · Accepted Answer

Preventive controls are designed to avoid the occurrence of a problem. Approving customer credit prior to approving a sales order is an example of a preventive control because it ensures that the organization is not extending credit to customers who cannot pay, reducing the risk of bad debts.

Answer: D
 Maintaining frequent backup records to prevent loss of data is also an example of a preventive control. By having backup records, the organization can prevent data loss from hardware or software failure, accidental deletion, hacking, or other disruptions, reducing the risk of data loss and downtime.

Which of the Following Is an Example of a Preventive