An internal control that reduces the risk of an existing or potential control weakness resulting in errors and omissions is known as what?

An internal control that reduces the risk of an existing or potential control weakness resulting in errors and omissions is known as what?

• A. Detective control
• B. Corrective control
• C. Compensating control
• D. Control owner

Answer: (C)

A compensating control is an alternative or additional control put in place to offset a weakness in another control or to cover a situation where a primary control is not feasible. Its purpose is to reduce the risk of errors or omissions to an acceptable level, even when the primary control isn’t fully effective. This differs from detective controls, which only identify problems after they occur, and from corrective controls, which fix issues after detection. A control owner is simply the person responsible for the control, not a type of control. For example, if automated approval of vendor payments isn’t available, a compensating control might be extra manual review and independent reconciliations to mitigate the risk.

A compensating control is an alternative or additional control put in place to offset a weakness in another control or to cover a situation where a primary control is not feasible. Its purpose is to reduce the risk of errors or omissions to an acceptable level, even when the primary control isn’t fully effective. This differs from detective controls, which only identify problems after they occur, and from corrective controls, which fix issues after detection. A control owner is simply the person responsible for the control, not a type of control. For example, if automated approval of vendor payments isn’t available, a compensating control might be extra manual review and independent reconciliations to mitigate the risk.