Reporting administratively to the chief financial officer (CFO) and functionally to the president results in the greatest impairment to the independence of the chief audit executive (CAE). The CFO is often heavily involved in financial oversight and decision-making, which can lead to potential conflicts of interest and pressures on the CAE to align with the CFO's objectives. Independence is best preserved when the CAE reports directly to the board or audit committee, which provides a higher level of oversight and ensures impartiality.