Which type of internal control is designed to establish desired outcomes?

Directive controls are designed to establish desired outcomes by ensuring that employees and processes follow set policies and procedures to achieve organizational goals. These controls guide behavior and decision-making within the organization, setting expectations for how tasks should be performed to meet desired objectives.

For example, directive controls might include formal protocols, training programs, and operational guidelines that help direct the actions of employees in alignment with the credit union's mission and values. By establishing these controls, organizations can influence activities to produce outcomes that align with their strategic objectives.

In comparison, preventative controls are focused on avoiding undesirable events before they occur, such as implementing access controls to prevent unauthorized transactions. Detective controls are intended to identify incidents or anomalies after they happen, such as audits or reconciliations that reveal errors or fraud. Corrective controls, on the other hand, are put in place to rectify issues that have already occurred to prevent recurrence, like updating practices following an error. Therefore, while all types of controls play a crucial role in an organization's internal control framework, directive controls specifically aim to establish and guide towards achieving desired results.