Final answer:
The most cost-effective type of internal control is preventive control, which involves putting measures in place to avoid potential risks and problems before they occur.
Step-by-step explanation:
The most cost-effective type of internal control is preventive control. Preventive controls are measures put in place to avoid potential risks and problems before they occur. By implementing preventive controls, companies can save time, money, and resources by preventing issues from happening in the first place.
For example, implementing strict hiring processes, such as thorough background checks and reference checks, can help prevent the hiring of dishonest employees who may engage in fraudulent activities. This reduces the risk of financial loss and the need for corrective actions.
On the other hand, accounting controls, detective controls, and corrective controls are also important in an internal control system, but they are not as cost-effective as preventive controls. Accounting controls ensure accurate financial record-keeping and reporting, detective controls help identify problems after they occur, and corrective controls correct existing issues.