Controls are usually categorised as either Preventive, Detective or Reactive. This is based primarily on where in a risk's life do they apply and as a result, do they modify the likelihood and or the impact of the risk.
Types of Risk Control
There are three major types. They are detective, preventative, and corrective.
Risk control methods include avoidance, loss prevention, loss reduction, separation, duplication, and diversification.
Internal controls also include the measures a company takes to ensure its employees comply with all laws and regulations and do not steal company assets. Physical controls like door locks, area restrictions, safes and surveillance equipment are internal controls, too.
There are five interrelated components of an internal control framework: control environment, risk assessment, control activities, information and communication, and monitoring.
Risk response strategies: mitigation, transfer, avoidance, acceptance.
The model is based on the four pillars of Supervision, Monitoring & Control, Interventions and Treatment and Victim Safety Planning.
Examples of engineering risk control measures could be installing a physical safety guard between the moving parts of a machine and the operator, or it could be installing safety cut-offs to allow fast shutdown in the case of imminent accident or injury.
What are Risk control measures? Risk control measures are the steps that are implemented by a company to reduce the chances that any of their employees will be injured on the job, or to reduce the chances that anything they make will cause harm to the community it is produced in.
Elimination. It is the most effective control. If it is possible to physically remove a hazard, it must be done.
The six principles of control activities are: 1) Establishment of responsibility, 2) Segregation of duties, 3) Documentation procedures, 4) Physical controls, 5) Independent internal verification, 6) Human resource controls.
The seven broad principles are: Establish responsibilities; Maintain adequate records; Insure assets and bond key employees; Separate recordkeeping from custody of assets; Divide responsibilities for related transactions; Apply technology controls; Perform regular and independent reviews.
Key controls are the primary procedures on which your organization relies to mitigate risk and prevent fraud. They are the first and most indispensable line of defense. Key controls often cover multiple risks or support the execution of a process. They are usually part of high-level analytical controls.
The primary purpose of internal controls is to help safeguard an organization and further its objectives. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws.
Another simple risk monitoring and control example would be if there has been some unexpected weather forecast. Companies always monitor powerful external forces like these, and a slate of bad weather may require them to put in some additional controls around work and production rates, as well as workplace safety.
Examples of control risks include cybersecurity risks, integrity and moral risks, risk of fraud, poor business system designs, etc. Control risk monitoring is a vital responsibility for an organization's accounting department.