- Sets the tone of an organization and is done through management
- Provides discipline and structure
- Based on the integrity, ethics and competence of management/employees
- Board should establish the foundation for overall direction
- The control environment sets out the role of the audit committee and board of directors.
- The control environment has a pervasive influence on the way business activities are structured.
- It is influenced by the entity’s history and culture.
2005 - Federal Transit Administration