The audit committee has asked the chief audit executive (CAE) to assist in the selection of a new external audit firm. Which of the following is an appropriate action by the CAE?
A) The CAE and two managers from the audit staff review the bids and select one firm to meet with the audit committee for the committee's approval.
B) The CAE develops a formal set of criteria for the audit committee to use in selecting the external auditor.
C) The CAE, chief financial officer, and controller review the bids, interview two firms, and recommend one of the two firms to the audit committee for its approval.
D) The CAE declines to participate in the process because providing this assistance would result in compromising the internal audit activity's objectivity.

Question

Quizplus · Accepted Answer

The CAE can assist by developing a formal set of criteria for the audit committee, which helps maintain objectivity and provides a structured approach for the selection process.

The Audit Committee Has Asked the Chief Audit Executive (CAE)