Which of the following best ensures the independence of the internal audit activity? 1. The CEO and audit committee review and endorse any changes to the approved audit plan on an annual basis. 2. The audit committee reviews the performance of the chief audit executive (CAE) periodically. 3. The internal audit charter requires the CAE to report functionally to the audit committee.
A) 3 only
B) 1 and 2 only
C) 2 and 3 only
D) 1, 2, and 3

Question

Quizplus · Accepted Answer

The independence of the internal audit activity is best ensured when the CAE reports functionally to the audit committee (3) and when the audit committee reviews the performance of the CAE (2).

Which of the Following Best Ensures the Independence of the Internal