The audit committee holds the primary responsibility for the appointment, compensation, and oversight of the external auditor. The chief audit executive (CAE) plays a crucial supportive and coordinative role in this process. While the CAE would typically assist by recommending selection criteria, evaluating the reasonableness of proposed fees, and monitoring the external auditor's work to ensure coordination and avoid duplication, the development of formal performance metrics is a core governance function of the audit committee. The committee sets the terms of engagement and the standards by which the external auditor's performance will be judged. The CAE's role is to provide input, not to own the development of these metrics.

A. The CAE's expertise in audit scope and resource requirements makes them well-suited to advise the audit committee on the reasonableness of the external auditor's proposed fee.

B. The CAE can provide valuable input to the audit committee on appropriate criteria for selecting an external auditor, such as industry expertise, reputation, and technical capabilities.

D. Monitoring the external auditor's work is a key part of the CAE's responsibility for coordination and reliance, as mandated by IIA Standard 2050, to ensure proper coverage and minimize duplication.

1. The Institute of Internal Auditors (IIA)

International Professional Practices Framework (IPPF). (2017). Implementation Guide 2050: Coordination and Reliance. "The CAE may also assist the board in its responsibility to select and oversee the external auditor. For example

the CAE may help the board develop criteria for selecting the external auditor

evaluate proposals

and recommend a candidate." This supports the validity of options A and B as typical CAE responsibilities.

2. The Institute of Internal Auditors (IIA)

International Professional Practices Framework (IPPF). (2017). Standard 2050: Coordination and Reliance. "The chief audit executive should share information

coordinate activities

and consider relying on the work of other internal and external assurance and consulting service providers to ensure proper coverage and minimize duplication of efforts." This standard underpins the responsibility outlined in option D.

3. Sarens

G.

& Abdolmohammadi

M. J. (2011). The role of the internal audit function in the context of the COSO 2004 and AS5 frameworks. International Journal of Auditing

15(2)

168-189. This article discusses the distinct governance roles within an organization. It reinforces the principle that the audit committee has ultimate oversight responsibility for the external auditor

which includes setting performance expectations and evaluation criteria

distinguishing its role from the CAE's more operational and advisory function. The development of performance metrics falls under this primary oversight duty. (DOI: https://doi.org/10.1111/j.1099-1123.2011.00427.x)