An organisation was in the process of establishing its new internal audit function. The chief executive officer (CEO) had no previous experience with internal auditors. Due to this lack of experience, the CEO advised the chief audit executive (CAE) that he would be reporting administratively to the external auditors. However, the CAE would have free access to the CEO to report anything important. The CEO would convey the CAE's concerns to the governing body. Which of the following is TRUE?

Question

Accepted Answer

The internal audit function will not be independent because the CAE reports administratively to the external auditors.

Answer

The internal audit function will be independent because the CAE has direct access to the governing body.

Answer

The internal audit function will not be independent because the company did not specify that the applicants must be certified internal auditors (CIAs).

Answer

The internal audit function will not be independent because the CEO has no experience with internal auditors.

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An organisation was in the process of establishing its new internal audit functi...

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