What is an External Control?

An external control is any type of outside influence that impacts the operations of a business. This may result in alterations to an organization’s governance, or its policies and procedures, or in how it deals with business partners.

Examples of External Controls

There are numerous examples of external controls, including the following:

Government regulations. A government could enact a law that prohibits a firm from using discriminatory hiring practices.
Downstream audits. A company could impose audits on its suppliers to ensure that they are complying with minimum labor standards.
Media scrutiny. The media could run a series of critical news stories about the environmental practices of a business, which may influence whether it continues to use those practices.