What is meant by 'detective controls'?

Detective controls are designed to identify and detect errors, fraud, or irregularities after they have already occurred. These controls are critical as they allow an organization to recognize issues and respond to them appropriately, mitigating potential damage. Common examples of detective controls include reconciliation processes, variance analysis, and audits.

By identifying problems post-event, organizations can implement corrective actions and improve future processes and controls, which enhances overall reliability and accountability within the financial reporting system. This proactive approach to identifying issues ensures that organizations can maintain integrity and transparency within their operations.

The other options relate to controls that serve different functions, such as preventing errors or focusing on training, but they do not align with the primary purpose of detective controls.