A chief audit executive (CAE) was asked to participate in the selection of an external auditor. Which of the following would not be a typical responsibility for the
CAE?
A chief audit executive (CAE) was asked to participate in the selection of an external auditor. Which of the following would not be a typical responsibility for the
CAE?
A chief audit executive (CAE) would typically be involved in evaluating the proposed external auditor fee because it pertains to financial considerations and budgeting, which is within the CAE's purview. Recommending criteria to be used in the selection process is also a typical responsibility, as it involves providing expert advice on what qualifications and standards the external auditor should meet. Monitoring the work of external auditors is another responsibility that falls within the CAE's role to ensure that the external audit process is thorough and meets the necessary standards. However, developing appropriate performance metrics is generally not a responsibility of the CAE, as it tends to be more related to the governance and oversight functions of the audit committee or board of directors, rather than the operational duties of the CAE.
Why is the answer not B?
This question got me too but I think I understand the answer this way: They're always pushing the idea the CAE can advise the Board (audit committee specifically) to select a good external auditor, but it's the Board's responsibility to make sure the external auditor actually performs. The test sort of assumes at times that all auditors are interchangeable and know each other's industry equally well, so A and B are obviously not the answer from the perspective of those are giving advice. I first thought the answer might be "D" because that comes later. Internal audit does monitor the work of the external auditor, but that doesn't happen while you're selecting the external auditor. It's really not a very good answer it seems like it should also count as "correct" because it's nonsense in the context of the question. But that is something the CAE does do, so I guess that's why they consider C to be a better answer. But "C" is the correct response because the Board should be evaluating the external auditor and not the CAE. Also isn't that a conflict of interest for the internal auditor to develop evaluation criteria for the external auditor? The test never likes it when party A does party B's job.
why not A?