When an organization is choosing a new external auditor, which of the following is the most appropriate role for the chief audit executive to undertake?
A.
Review and acquire the external audit service.
B.
Assess the appraisal and actuarial services.
C.
Determine the selection criteria.
D.
Identify regulatory requirements to be considered.
The chief audit executive may assist the audit committee or board in the external auditor selection process by helping determine or recommend selection criteria. Relevant criteria may include independence, competence, industry experience, audit methodology, regulatory knowledge, staffing, technology capability, fee structure, and communication approach. The CAE should not independently acquire the external audit service because appointment is normally a board or audit committee responsibility. Assessing appraisal and actuarial services is too narrow and not the main selection role. Identifying regulatory requirements may be useful, but it is not as central as establishing selection criteria. Internal audit’s role should support governance without taking over the board’s responsibility. Therefore, Option C is correct.
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