What are detective controls?

Detective checks are the measures used to identify irregularities to be repaired, ideally as quickly as possible. Laws, such as the Sarbanes-Oxley law of 2002, are loading on the use of internal inspections to solve common accounting and ethical problems, and companies also want to use controls to avoid waste, fraud and other problems they may encounter during business. Corrective controls are against detective controls, which are measures to prevent problems that appear in the first place.

One example of detective control is an audit. Most companies organize regular external and internal audits to review the financial statements, explore the department and determine if there are any irregularities. This could include signs of embezzlement and fraud within the company, as well as an activity indicating an attempt to cover the financial problems of investors, regulators and the general public. Mohou use surprising audits as another form of detective control, so people never know when to expect an evaluation. If the department always gives off the same supplier for the same amount, a sudden change may be a reason for concern and a detective inspection could be determined to announce the accounting department when variations to realize what happened and why.

Companies can use measures such as mandatory reporting forms to capture irregular activities soon, often in the form of financial statements that do not correspond to what a person or department actually does. These detective controls may include things such as automatic data sending to accounting for checking, and providing continuous audit so people can catch anything that does not contain almost as soon as it happens. Accountants and lawyers can cooperate on the development of relevant and efficient checks.

someEré detective checks are determined by law and companies must prove that they use and adhere to regulatory standards to use these checks. Others are considered part of generally recognized standards and practices, and although they are not explicitly required, they are a very good idea. Companies that deviate from the procedures adopted may be to concern and suspicion because people will want to know why they do not keep up with other companies in terms of accounting procedures. Other controls can be optional, but recommended, for legal or ethical reasons.