Which of the following organizationwide practices is most likely to be acceptable to the CAE?

A newly appointed chief audit executive (CAE) started analyzing the organization’s policies in an attempt to customize them to address internal audit specifics.

Which of the following organizationwide practices is most likely to be acceptable to the CAE?
A . Internal auditors1performance evaluation is primarily based on both client satisfaction surveys and cost savings identified from the audits.
B . Standard training for each employee, including internal auditors, is 10 hours per year.
C . To enhance efficiency, internal auditors should not be rotated regularly among engagements.
D . Hiring practices include requiring potential auditors to disclose any significant stock ownership in the organization.

View Answer

Answer: D

Explanation:

Among the options, requiring potential auditors to disclose any significant stock ownership in the organization is most likely to be acceptable to a CAE aiming to ensure the integrity and independence of the internal audit function. This practice helps manage potential conflicts of interest and aligns with the principles of objectivity and independence in internal auditing standards.

Reference: The Institute of Internal Auditors (IIA) – Code of Ethics and International Standards for the Professional Practice of Internal Auditing.