Controlling area & does not exist

What causes this issue?

Controlling area &V1& has not been created

System Response

Postings assigned (such as via company code &V2&) to a controlling area
that has not been created are not possible.

How to fix this error?

Assign an existing controlling area to your company code or create
controlling area &V1&. Both of these operations are executed with the
configuration functions.

Error message extract from SAP system. Copyright SAP SE.