Action Controls

Question 1

What is an action control?

Answer 1

• Ensuring that employees perform (do not perform) certain actions known to be beneficial (harmful) to the organization.
• Although action controls are commonly used in organizations, they are not effective in every situation.
• They are feasible only when managers know what types of actions as un(desirable) and have the supervisory ability to ensure that these types of actions (do not) occur.

Question 2

What are behavioural constraints and give an example?

Answer 2

• They are 1 out of the 4 basic forms of action controls
• Behavioural Constraints are “negative” and a constraining form of action controls
• They make it impossible, or at least more difficult, for employees to do things they should not do. These can be applied physically or administratively.
• Physical – locks, ID card scanners, Passwords etc retail inventory shrinkage
• Administrative – limits employee’s ability to perform all or a portion of tasks/actions. Whether they can approve expenditures and to what amount

Question 3

What are Pre-action reviews and give an example?

Answer 3

•Pre-action reviews involve the scrutiny of actions plans. Reviewers can approve or disapprove the proposed actions, request modifications, or ask for a more carefully considered plan before granting approval.

Question 4

What is action accountability and give an example?

Answer 4

• Holding people responsible for their actions (rather than their results)
• Defining, communicating, observing, rewarding/punishing
• Policy’s, contracts or codes of conduct
• Monitoring and supervision – GPS truck drivers
• Pernod - having your initials on everything

Question 5

What is redundancy in respect to control and give an example?

Answer 5

• Assigning more resources (staff or equipment) to a task that is necessary increases the probability the task will be reliably completed
• Computer facilities
• Conflicts?

Question 6

Which action controls prevent and which detect?

Answer 6

• Prevent – behavioural constraints (locks, badges), pre-action reviews, redundancy
• Detect – Action Accountability, all info needs to be gathered before harm can be spotted

Question 7

Action controls are only

effective when:

Answer 7

• Organisations can determine what actions are un(desirable) – need to be up to date, well defined and not too tight.
• Organisations are able to ensure that un(desirable) actions (do not) occur. – Management override – AllFirst Finance – FOREX. Fraud survey, 1/5 could have been prevented if management had done a sufficient job of reviewing. Another 1/5 could have been prevented had there not been an override of management controls. Hard to measure – length of calls but what if the customer is difficult?