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Understanding Internal Controls
There are four (4) key internal controls. These controls are:
The paragraphs that follow describe these controls and provide examples of the same.
Directive controls are designed to provide guidance and direction to an organization's workforce with the end goal of achieving a desired event.
Detective controls are measures implemented by an organization to timely detect mistakes, violations of internal policies and procedures, noncompliance with applicable law, and other undesirable events.
Preventive controls are measures taken by an organization to prevent undesirable events from occurring.
Corrective controls are measures enacted by an organization: (i) to assess gaps in operational processes and enact an appropriate response plan to reduce identified problems; and (ii) in response to the occurrence of an undesirable event with the main goals of: (a) impeding the forward motion of said event; (b) mitigating any untoward effects brought forth by the undesirable event; (c) set forth operational actions to reduce the likelihood of future undesirable events.
Resources Regarding Internal Controls