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Compensatory controls are designed to provide alternative solutions that address risks when primary controls are found to be ineffective. These controls come into play as a substitute to ensure that risk management efforts remain robust in scenarios where the intended preventive measures fail.

For instance, if a company has a primary control aimed at preventing fraud but it is not functioning properly, a compensatory control may involve stricter oversight or enhanced monitoring processes to mitigate the risk. This adaptability is crucial in maintaining the integrity of risk management frameworks, as it allows organizations to respond effectively to weaknesses without abandoning their overall control objectives.

In contrast, preventive controls aim to stop undesirable events before they occur, making them less effective if they are already deemed ineffective. Directive controls are focused on providing guidance to an organization, not necessarily compensating for failures in controls. Detective controls are designed to identify issues after they have occurred, which does not address the immediate risk posed by ineffective preventive measures. This makes compensatory controls particularly valuable when primary controls are lacking or unavailable.