Video: Internal Controls Classification

In this lesson, Nick Palazzolo, CPA, dives into the frameworks of internal controls, especially as they pertain to IT and enterprise risk management. He clearly outlines the three fundamental control types—preventive, detective, and corrective—detailing their functions in safeguarding a company's system. Preventative controls aim to stop errors or fraud before they can happen, detective controls identify issues post occurrence, and corrective controls resolve and repair the damage caused. To further aid comprehension, Nick provides relatable examples and discusses specific measures such as segregation of duties and reformatted input, emphasizing that these controls, while vibrant in variety, essentially serve as vital checks within a company's control environment to ensure accuracy, security, and integrity.