The type of internal control to reduce loss of cash due to employee error or theft is a
A) preventative
B) detective
C) corrective
D) deductive

Question

Quizplus · Accepted Answer

Preventative internal controls are designed to prevent errors or fraud from occurring in the first place. In the case of reducing loss of cash due to employee error or theft, preventative controls might include implementing security measures such as having two employees count cash, requiring regular reconciliations of cash on hand, and limiting access to cash to only authorized employees. Detective controls, on the other hand, are designed to identify errors or fraud after they have occurred, such as monitoring bank statements for unusual transactions. Corrective controls are put in place after errors or fraud have been identified in order to address and resolve the issue, and deductive controls do not pertain to internal controls.

The Type of Internal Control to Reduce Loss of Cash