What is Control environment?
In short
The control environment is the set of standards, processes and structures that is the foundation of internal control, including management's integrity and ethical values, board oversight, organizational structure, competence and accountability.
Key takeaways
- It is one of the five components of internal control in the Committee of Sponsoring Organizations of the Treadway Commission framework, often called the tone at the top.
- Weaknesses in it have a pervasive effect and can undermine other controls.
- The auditor must understand it in every audit.
Where it's tested
AUD: Understanding the Entity & Internal Control — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
The control environment is best described as: