Which of the following BEST describes this type of control?

A small business does not have enough staff in the accounting department to segregate duties. The controller writes the checks for the business and reconciles them against the ledger. To ensure there is no fraud occurring, the business conducts quarterly reviews in which a different officer in the business compares all the cleared checks against the ledger.

Which of the following BEST describes this type of control?
A . Deterrent
B . Preventive
C . Compensating
D . Detective

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Answer: C

Explanation:

A compensating control, also called an alternative control, is a mechanism that is put in place to satisfy the requirement for a security measure that is deemed too difficult or impractical to implement at the present time.

"Compensating controls are additional security measures that you take to address a vulnerability without remediating the underlying issue."

A compensating control is a control that reduces the risk of an existing or potential control weakness2 In this case, the lack of segregation of duties in the accounting department is a control weakness that increases the risk of fraud or error. The quarterly reviews by a different officer are a compensating control that reduces this risk by providing an independent verification of the transactions recorded by the controller.

Reference: 2 Segregation of Duties: What it is and Why it’s Important – Hyperproof