Answer (A) is correct . Preventive controls are designed to prevent an error or an irregularity. Detective and corrective controls attempt to identify and correct errors or irregularities that have already occurred. Preventive controls are usually more cost beneficial than detective or corrective controls. Assigning two individuals to open mail is an attempt to prevent misstatement of cash receipts.
Answer (B) is incorrect because Reconciling the subsidiary file with the master file may detect and lead to the correction of errors, but the control does not prevent errors.
Answer (C) is incorrect because The use of batch totals may detect a missing or lost document but will not necessarily prevent a document from becoming lost.
Answer (D) is incorrect because Bank reconciliations disclose errors in the accounts but have no preventive effect.
|
