Which type of controls are determined by human judgment?

Discretionary controls are characterized by their reliance on human judgment and decision-making. Unlike other types of controls, discretionary controls allow individuals to interpret situations and decide the most appropriate course of action based on their expertise and understanding of the context.

These controls are typically used in situations where rules and procedures may not cover every possible scenario or where flexibility is needed to adapt to unique circumstances. For instance, a manager might have the discretion to approve exceptions to standard procedures based on the specific details of a situation, which requires a level of judgment that goes beyond rigid applications.

In contrast, general controls are more focused on the overall environment of the organization, while application controls relate to specific systems and processes. Manual controls involve physical intervention in processes where human action is required, but they do not necessarily depend solely on judgment. Discretionary controls stand out in that they explicitly call for the individual’s assessment and decision-making capabilities in determining the appropriate response.