3 Types of Controls - Preventive, Detective, and Corrective Controls can be designed for various functions. Preventive Controls are more cost-effective than detective controls and are designed to discourage errors and irregularities from occurring. When built into a process, preventive controls forestall errors and thereby avoid the cost of correction. Detective Controls are usually more expensive than preventive controls, but are also essential, and are designed to find errors or irregularities after they have occurred.
Detective controls measure the effectiveness of preventive controls.
Detective controls also include such control devices as bank reconciliations, independent checks on performance, confirmation of bank balances, cash counts, and systems of review like internal auditing. Corrective controls come into play when improper outcomes occur and are detected. All the detective controls in the world are valueless if the identified deficiency remains uncorrected or is permitted to recur. Corrective controls such as documentation and reporting systems keep problems under management surveillance until they have been solved or the defect corrected. Corrective controls thus close the loop that starts with prevention and passes through detection to correction.