A medium-sized, publicly owned organisation operating in country Z has grown to a size that its directors believe warrants the establishment of an internal auditing function. Country Z has legislated internal auditing requirements for government-owned organisations. The organisation has therefore changed its articles of association to reflect the establishment of the internal audit function. The directors have decided that the Chief Audit Executive (CAE) must be a certified internal auditor (CIA) and will report directly to the newly established Audit Committee of the Board of Directors.

Required:

Which one of the following will contribute the most to the new CAE’s independence?

Question

A medium-sized, publicly owned organisation operating in country Z has grown to a size that its directors believe warrants the establishment of an internal auditing function. Country Z has legislated internal auditing requirements for government-owned organisations. The organisation has therefore changed its articles of association to reflect the establishment of the internal audit function. The directors have decided that the Chief Audit Executive (CAE) must be a certified internal auditor (CIA) and will report directly to the newly established Audit Committee of the Board of Directors.  
 
 Required: 
 
 Which one of the following will contribute the most to the new CAE’s independence?

Accepted Answer

The CAE will report to the audit committee of the board of directors.

Answer

Country Z has legislated internal auditing requirements.

Answer

The CAE is to be a CIA.

Answer

The establishment of the internal audit function is documented in the articles of association.

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A medium-sized, publicly owned organisation operating in country Z has grown to ...

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