Internal controls may be preventive or detective.Which of the following controls is preventive?
A)Requiring two persons to open mail containing payments.
B)Reconciling the accounts receivable subsidiary file with the control account.
C)Using batch totals.
D)Preparing bank reconciliations.

Question

Quizplus · Accepted Answer

Requiring two persons to open mail containing payments is a preventive control because it is designed to prevent errors or fraudulent activities from occurring in the first place by introducing a system of checks and balances. The other options are detective controls because they are designed to detect errors or discrepancies after they have occurred. Reconciling the accounts receivable subsidiary file with the control account, using batch totals, and preparing bank reconciliations are all examples of detective controls.

Internal Controls May Be Preventive or Detective