Chapter 3: Action, Personnel and Cultural Controls

Question 1

Name the four types of action controls!

Answer 1

• Behavioural constraints
• Action accountability
• Preaction controls
• Redundancy

Question 2

Which are the conditions determining the effectiveness of action controls?

Answer 2

• organisations can determine what actions are (un)desirable
• organisations are able to ensure that the (un)desirable actions (do not) occur

=> management override occurs when management ignores effective controls (reason for undetected fraud)

Question 3

Name the three types of personnel controls!

Answer 3

• Selection and placement of employees
• Training
• Job design and provision of necessary resources

Question 4

Name the five types of cultural controls!

Answer 4

• Code of conduct
• Group rewards
• Intraorganisational transfers
• Physical arrangements
• Tone at the top

Question 5

Describe the effectiveness of personnel / cultural controls!

Answer 5

• sometimes referred to as soft controls => more important over the last few years
• organisations are flatter and leaner => important advantages:

+ they are usable in almost every setting
+ costs are often lower than more penetrant forms of controls
+ usually come with fewer harmful side effects