Western Governors University (WGU) ACCT3340 D215 Auditing Practice Exam

Detective controls are specifically designed to identify and rectify errors or irregularities that occur after transactions have taken place. These controls are essential in the auditing process, as they help organizations uncover any issues or discrepancies that may not have been prevented through preventive controls.

For example, detective controls might include the reconciliation of bank statements, review of transaction logs, and analysis of reports for unusual patterns. By effectively identifying issues post-transaction, an organization can take corrective actions and mitigate potential losses or risks.

The emphasis here is on the reactive nature of these controls, contrasting with preventive measures that aim to stop fraud or errors before they happen. This distinction is crucial for anyone studying auditing practices, as it highlights the importance of having a comprehensive internal control system that includes both preventive and detective mechanisms to safeguard financial integrity.