What is the purpose of detective controls?

Detective controls are specifically designed to identify and uncover fraudulent activities that have already occurred within an organization. These controls help organizations detect and respond to fraud by monitoring activities, transactions, and behaviors that could indicate wrongdoing. By identifying incidents of fraud post-occurrence, organizations can implement corrective measures, such as investigating the cause of the fraud and taking appropriate disciplinary actions.

The primary function of detective controls is not to prevent fraud; rather, it is to provide insight into any fraudulent activities that may have slipped through preventative measures. This is vital in a comprehensive fraud prevention strategy, as recognizing and learning from fraud incidents can lead to improved controls and processes moving forward. Having a strong detective control system in place enhances an organization’s ability to mitigate losses and reinforce its fraud response strategies.

While options related to preventing fraud, providing an audit trail, and enhancing employee accountability all play important roles in an organization’s overall fraud strategy, they do not directly pertain to the core purpose of detective controls, which is to successfully identify fraud that has taken place.