The control environment is influenced by a variety of internal and external factors, including the entity's history, values, market, and the competitive and regulatory landscape. It is defined by the standards, processes, and structures that guide people at all levels in carrying out their responsibilities for internal control and making decisions. It creates the discipline that supports the assessment of risks to the achievement of the entity's objectives, performance of control activities, use of information and communication systems, and conduct of monitoring activities.

An organization that establishes and maintains a strong control environment positions itself to be more resilient in the face of internal and external pressures. It does this by demonstrating behavior consistent with the organization's commitment to integrity and ethical values, adequate oversight processes and structures, organizational design that enables the achievement of the entity's objectives with appropriate assignment of authority and responsibility, a high degree of competence, and a strong sense of accountability for the achievement of objectives.

Organizational culture supports the control environment insofar as it sets expectations of behavior that reflects a commitment to integrity and ethical values, oversight, accountability, and performance evaluation. Establishing a strong culture considers, for example, how clearly and consistently ethical and behavioral standards are communicated and reinforced in practice. As such, culture is part of an organization's control environment, but also encompasses elements of other components of internal control, such as policies and procedures, ease of access to information, and responsiveness to results of monitoring activities. Therefore culture is influenced by the control environment and other components of internal control, and vice versa.