An auditor is assessing control risk for the sales cycle. The auditor observes that the software automatically prevents the processing of a sales order if the customer's credit limit is exceeded. This is an example of:

Answer options:

A detective general control.

A preventive general control.

A detective application control.

A preventive application control.

How to approach this question

Classify the control: Does it stop (prevent) or find (detect)? Is it specific (application) or infrastructure (general)?

Full Answer

D.A preventive application control.✓ Correct

Application controls apply to the processing of individual transactions (like sales). Preventive controls are designed to avoid errors or irregularities from occurring. Blocking a sale over credit limit is a classic preventive application control.

Common mistakes

Confusing General vs Application controls.

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