CIA Part 1 - Q12

12. The Standards require that the chief audit executive (CAE) seek the approval of management and the board of a formal, written internal audit charter. The purpose of the internal audit charter is to

a. Protect the internal auditing activity from outside influence.

b. Establish the purpose, authority, and responsibility of the internal auditing activity.

c. Define the internal auditor’s relationship with the external auditor.

d. Define the role of the chief audit executive as a member of the audit committee.

12. Solution: b

a. Incorrect. The IAA charter does not protect the IAA from outside influence.

b. Correct. The purpose, authority and responsibility of the IAA must be formally defined in the charter.

c. Incorrect. The IAA charter does not define the relationship between the internal and external auditors.

d. Incorrect. The CAE should not, under any circumstance, be a member of the audit committee.