How do preventive controls differ from detective controls?

The distinction between preventive controls and detective controls is a fundamental concept in risk management and internal auditing. Preventive controls are designed to avert potential risks before they occur. Their primary function is to stop incidents or errors from happening in the first place, thereby reducing the likelihood of adverse events.

On the other hand, detective controls serve to identify and alert management when risks have manifested into actual issues or incidents. They do not prevent the issues from occurring but serve to detect them after they have occurred, allowing organizations to respond appropriately.

This fundamental difference in purpose is what makes the choice about how preventive controls avert risks while detective controls identify them the correct response to the question. Understanding this distinction is critical for anyone involved in internal auditing or risk management, as it helps in developing a balanced internal control system that includes both preventive and detective measures.