An example of a preventive control is
A) a single person handles the responsibilities for operations, custody of assets, and accounting
B) separation of the Purchasing Department and Accounting Department personnel
C) bonding employees who handle cash
D) accepting payment in currency only

Question

Quizplus · Accepted Answer

Separation of the Purchasing Department and the Accounting Department personnel is an example of a preventive control because it reduces the likelihood of fraud or errors occurring. It ensures that there is no collusion between the two departments, which can lead to fictitious invoices, overpayments, or other fraudulent activities.

A) is an example of a lack of segregation of duties, which creates an opportunity for fraud or errors to occur.
C) is an example of a detective control because it only detects the problem after it has occurred, rather than preventing it from happening in the first place.
D) is an unrealistic control, as it limits the payment options available to customers and is not feasible in today's cashless society.

An Example of a Preventive Control Is