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This addresses the control environment & internal controls.

What is the control environment? How does the control environment affect a company's internal controls? What are the negative and positive elements of a control environment?

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A control environment is made up of the functions, activities, attitudes, and general awareness of management, and the tone that management sets for the control environment will effect how strong the control environment is within the company. If the control environment is strong, this is displayed through management's actions, and management acts accordingly, by acting ethically, and by instructing employees that they must follow the rules and remain productive. If the control environment is weak, this is also apparent by the attitudes, functions, and activities of management, and typically shows through unethical decision making ...

Solution Summary

The solution provides a discussion explaining the control environment, how the control environment affects a company's internal controls and addresses the negative and positive elements of a control environment.