Comprehensive and Detailed Step-by-Step Explanation:
Reporting to the Controller: Independence is compromised when the CAE reports to an operational management role such as the controller, as this creates a conflict of interest and undermines objectivity. The IIA Standards recommend that the CAE report functionally to the board and administratively to the CEO to preserve independence.
[: IIA Standard 1110: Organizational Independence requires the CAE to have direct access to the board to maintain independence., Other Options:, Option A: Participating in executive management meetings does not impair independence and is encouraged to provide insights and recommendations., Option B: Having access to records, personnel, and properties is necessary for effective auditing and does not impair independence., Thus, the correct answer is C. The CAE reports directly to the controller for the organization, and the internal audit activity resides in the office of the comptroller., ]
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