The chief audit executive (CAE) annually develops a budget and resource plan and submits it to the board for approval. This action best fulfills which of the following responsibilities of the CAE?
A.
The responsibility to maintain organizational independence.
B.
The responsibility to perform engagements with due professional care.
C.
The responsibility to communicate corrective action plans to the board.
D.
The responsibility to define the purpose of the internal audit activity.
The responsibility of the chief audit executive (CAE) to maintain organizational independence is fulfilled by developing and submitting an annual budget and resource plan to the board for approval. By doing so, the CAE ensures that the internal audit activity has the necessary resources to operate effectively without undue influence from management. This process upholds the independence and objectivity of the internal audit function, as it allows the board to oversee and approve the resources needed for the audit activity, thus preventing potential conflicts of interest and ensuring the audit function remains free from managerial interference.
The IIA’s International Standards for the Professional Practice of Internal Auditing (Standards) - Standard 1110: Organizational Independence.
The IIA’s Practice Guide on Maintaining Internal Audit Independence.
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