Final answer:
A preventive control is one that is designed to prevent errors or fraud from occurring in the first place. The correct answer in the provided list is 'Segregation of duties' which is a preventive measure to ensure no single individual has control over all aspects of a financial transaction.
Step-by-step explanation:
The student is asking about types of internal control mechanisms within a business or financial environment. Specifically, the question is focused on identifying which option listed would be considered a preventive control. Preventive controls are designed to deter errors or fraud from happening in the first place. Among the options provided:
- Segregation of duties is indeed a preventive control because it prevents errors or fraud by having more than one person required to complete certain tasks, so that no single individual has control over all aspects of a financial transaction.
- Reconciliations are detective controls as they are used to identify errors or discrepancies after they have occurred by comparing different sets of data.
- Surprise cash counts and surprise inventory counts are also considered detective controls because they are designed to detect errors or misappropriations after they have occurred.
Therefore, the correct answer to the student's question is Segregation of duties.