Question

How do you think that the selection of the appropriate preventative, detective and corrective controls applied in a specific situation or business operation should be guided by factors such as

a) The legal obligations of the business

b) The contractual obligations of the business

c) The internal culture of the business

d) The nature of the experience that it wants its customers to have

e) The costs of implementing each specific control versus the benefits derived from that control in terms of things such as dollar savings, legal or contractual compliance, goodwill or reputation.

Answer 1

The answer is option “e” - The costs of implementing each specific control versus the benefits derived from that control in terms of things such as dollar savings, legal or contractual compliance, goodwill or reputation.

Explanation – Preventive, detective and corrective controls are aspects of internal control activities and are implemented to ensure the effectiveness and efficiency of operations of a company.