Which of the following reporting relationships results in the greatest impairment to the independence of the chief audit executive (CAE)?
Which of the following reporting relationships results in the greatest impairment to the independence of the chief audit executive (CAE)?
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.
I disagree with A. D sounds better because the CAE should functionally report to the board and administratively to the CEO
In D, there is a single hierarchical and functional reporting relationship. In addition, the Board is not taken into the equation.
The question is what is greatest impairment to the CAE independence?